Takhar v Gracefield Developments Limited & Ors [2024] EWHC 1714 (Ch) (03 July 2024)

HHJ TINDAL:

Introduction

1. This case is the sequel to Takhar v Gracefield [2020] AC 450, in which the Supreme Court held that where it was proved that a judgment had been obtained by fraud, a party seeking to set it aside did not have to show that they could not with reasonable diligence have uncovered and alleged that fraud before that judgment (which I shall refer to as 'the Supreme Court Takhar Judgment').

2. That decision opened the door to Mrs Balber Takhar (the Claimant as I shall call her) to seek to set aside for fraud the 2010 judgment of the late HHJ Purle QC sitting as a High Court Judge (Takhar v Gracefield [2010] EWHC 2872 (Ch): ('the Purle Judgment'). She alleged her signature on a key document HHJ Purle QC relied on had been forged by the Defendants - her cousin the Third Defendant ('Mrs Krishan') and the latter's husband the Second Defendant ('Dr Krishan'), directors and shareholders of the First Defendant company ('Gracefield'). In 2020 before Mr Gasztowicz QC sitting as a High Court Judge (Takhar v Gracefield [2020] EWHC 2791 (Ch), 'the Gasztowicz Judgment')) the Claimant did prove fraud and the Purle Judgment was set aside. (Mr Gasztowicz QC's costs judgment is reported at [2020] Costs LR 1851).

3. This case is the retrial of the original action, but with two new causes of action: deceit and conspiracy. The former effectively duplicates one of the original claims, undue influence. The latter alleges fraudulent conduct of the previous action, as found in the Gasztowicz Judgment. The Defendants deny all claims on the merits and raise limitation on the new claims. This case raises three legal issues of wider relevance after judgments are set aside for fraud - not covered by much direct authority according to my research ('the three wider questions'):

3.1 First, what approach should be taken to Res Judicata, credibility, memory (given cases since Gestmin v Credit Suisse [2013] EWHC 3560) and findings of fact on a re-trial after a judgment is set aside for fraud ?

3.2 Second, can fraudulent misrepresentation amount to undue influence and if so, does it require a pre-existing 'relationship of trust and confidence' ?

3.3 Third, can fraud in procuring a judgment allow it to be set aside and amount to 'unlawful means' for the tort of conspiracy sounding in damages ?

4. The second and third questions also link to limitation. Deceit is no longer pursued as a tort due to limitation, but it founds the argument that fraudulent misrepresentation also amounts to undue influence, not argued before HHJ Purle QC. Conspiracy is new, but raises the point that (following the Supreme Court Takhar Judgment) whilst reasonable diligence in discovering fraud is not necessary to set a judgment aside, it is highly relevant to whether a new claim arising from or concealed by fraud is limitation-barred, since s.32(1) Limitation Act 1980 states where an action is based on fraud, time does not start to run until the claimant 'could with reasonable diligence have discovered it'.

5. In terms of the essential background to this case, initially, I very respectfully adopt the factual summary (albeit parts of it are in dispute before me) by Lord Kerr in the Supreme Court Takhar Judgment at [1]-[6]:

"Balber Kaur Takhar, the claimant, is the cousin of the third defendant, Parkash Kaur Krishan. For many years before 2004, they had not seen each other. In that year they became reacquainted. At the time, Mrs Takhar was suffering personal and financial problems. She had separated from her husband some five years previously. As part of the arrangements made between Mrs Takhar and her husband, she had acquired a number of properties in Coventry. When Mrs Takhar and Mrs Krishan met again, according to Mrs Takhar, she confided in her cousin and grew increasingly to depend upon her. Mrs Takhar claims that Mrs Krishan exerted considerable influence over her. The financial problems of Mrs Takhar arose mainly from the condition of the properties which she had acquired from her husband. Some were in a dilapidated condition. Payment for rates were in arrears. Bankruptcy for Mrs Takhar was in prospect. The Krishans provided financial help to Mrs Takhar. Dr Krishan, the second defendant and the third defendant's husband, took on responsibility for negotiating with Coventry City Council over the rates arrears and the dilapidated state of some of the buildings. Then, in November 2005 it was agreed the legal title to the properties would be transferred to Gracefield Developments Ltd, a newly formed company, of which Mrs Takhar and the Krishans were to be the shareholders and directors [as happened in 2006]. Mrs Takhar claims that it had been agreed between her and the Krishans the properties would be renovated and then let. The rent would be used to defray the cost of the renovation, which, in the short term, would be met by the Krishans. Mrs Takhar would remain beneficial owner of the properties. The Krishans present a very different account. They claim that Gracefield was set up as a joint venture company. The properties were to be sold after they had been renovated. They were to be given an agreed value and this would be paid to Mrs Takhar after they had been sold. Any profit over would be divided equally between Mrs Takhar and the Krishans. They explain that Mrs Takhar agreed to these arrangements because planning permission for development had to be obtained in order to realise the value of the properties and this was an area in which Dr Krishan had experience, having already successfully developed his own medical centre."

6. Whilst I detail the full procedural history below, in short, in October 2008 the Claimant sued alleging on her version of the agreement was a trust or a contract, and on the Defendants' version, it was procured by undue influence or was an unconscionable bargain. However, the Defendants relied on a written 'Profit Share Agreement' ('PSA') consistent with their case the Claimant had apparently signed. Whilst she denied that, she did not claim forgery. HHJ Purle QC relied on that to dismiss the Claimants' claims in 2010. However, in 2013, she obtained expert evidence that her 'signature' was a forgery and applied to set aside the Purle Judgment. The Defendants sought to strike that out as an abuse of process, which failed in 2015. That result was confirmed by the Supreme Court in 2019, which held the Claimant could aside the judgment for fraud without proving she could not have discovered it beforehand. In October 2020, Mr Gasztowicz QC found her signature had indeed been forged - by the Defendants - and set aside the Purle Judgment. The proceedings before me were therefore a re-trial of those original allegations with the new cause of action of conspiracy (and deceit) added in March 2015. The two actions were consolidated by consent in 2021.

7. The case was (re-)listed for trial in December 2023 before me. Mr Halkerston was Counsel for the Claimant (showing total command of a bundle of 10,000 pages). Mr Graham and Mr Perring were for the Defendants (only instructed two weeks before trial, with faultless preparation at lightning speed). Owing mainly to the Claimant's evidence, the 8-day trial did not prove enough and we re-listed 2 days of submissions in January 2024. The break enabled the Claimant to indicate that she only pursued claims in undue influence, resulting trust and conspiracy, the latter narrowed to forgery in the earlier case. This also gave me the chance to raise various authorities on the three wider legal questions and Counsel to prepare extremely helpful submissions - Mr Graham on the facts, Mr Perring on the law, Mr Halkerston on both (assisted by Mr Lee Jia Wei on remedies). So, I have considered about 150 authorities in this judgment - the vast majority ventilated with Counsel. However, as I have written, I have referred to others cited in texts I was referred to as 'worked examples' of points. I have also analysed others in more detail on conspiracy (on the wider implications of the issue which Counsel left to me), resulting trust (which has risen in prominence in this case) and remedies. Indeed, in preparing my draft judgment, it became apparent I needed more submissions on remedies. So rather than a straightforward hand-down hearing, I had a further day of submissions on remedies and consequentials. This ended up rather delayed as although I circulated my draft judgment in March 2024, the Defendants were unavailable for a period of time as they were out of the country, so that hearing was listed in June 2024. Having heard submissions, I gave brief oral reasons for my conclusions (along with costs etc) and then after inviting brief further submissions on interest, I finalised this judgment, handing it down with an order reflecting my decision. As the Claimant raised a narrow application for permission to appeal on remedies and interest, for convenience I have addressed those points in this judgment right at the end.

8. With the focussing of the Claimant's case after the evidence, re-ordering and simplifying the list of issues after trial, the issues I must still resolve are these:

(i) Did the Krishans make any or all of the following misrepresentations to the Claimant from May/June 2005 before transfer of the Properties in 2006 ?

(1) That any of the Properties were (or were 'likely' to be) subject to Compulsory Purchase Orders ? ('CPO's)

(2) That the Properties were 'worthless' or only worth £100,000 in total because of the CPOs or the threat of them ?

(3) That if the CPOs or the threat of them could be removed, the Properties would be worth £300,000 ?

(4) That if the Claimant agreed to transfer the Properties to a company, they would take appropriate steps to ensure CPOs or threat of them were removed and refurbish and manage them for her benefit ?

(5) That the proposed transfer was an 'act of charity' by the Krishans ?

(ii) If so, were any or all representations made knowingly/recklessly untrue ?

(iii) What were the terms of transfer of the Properties in March/April 2006 ?

(iv) Did the Claimant sign an unforged copy of the Profit Share Agreement ?

(v) Did the Claimant repose sufficient trust and confidence in the Defendants in respect of the Properties so as to give rise to potential undue influence ?

(vi) Were the transfers from the Claimant procured by actual undue influence as a result of any or all of the alleged misrepresentations ?

(vii) If so, was their agreement in 2005/06 and/or the transfer of the Properties in 2006 procured by their presumed undue influence over her ?

(viii) Did Gracefield hold the Properties on resulting trust for the Claimant ?

(ix) Is the Claimant entitled to rescind the agreement and/or transfers ? If so, what remedy is appropriate given the Properties have now all been sold ?

(x) What was the true market value of the Properties (1) on transfer in April 2006 ?; (2) on actual sale in 2011/2014 ?; (iii) in November 2022 ?

(xi) Must the Claimant give credit for (1) any sums received from the Defendants; or (2) any expenditure incurred by them on the Properties ?

(xii) Is the conspiracy claim barred by limitation ?

(xiii) Did the Defendants conspire to injure the Claimant by unlawful means by means of deploying forged evidence in litigation between October 2008 and the eventual sale of all the Properties in 2011-2014 ?

(xiv) If so, what damages should be ordered ? Should rental income be ordered ?

(xv) If any damages are payable to the Claimant, what interest is payable ?

9. This is now effectively 'two cases in one': a retrial of the original action (albeit actual undue influence is now pursued through the claim of fraudulent misrepresentation) and a new conspiracy claim on the conduct of that action (which now must itself be the subject of detailed findings of fact as the Krishans still deny the forgery but on a different basis than before Mr Gasztowicz QC). Therefore, the fact-finding exercise is on multiple layers, based on a 10,000-page bundle over a 20-year period, with difficulties in the evidence of all the key witnesses. So, given the tortuous history of this litigation, whilst I have not read every page or dealt with every point, I have tried to deal with the case thoroughly. Following a review of the authorities on memory and fact-finding since Gestmin, I assess the evidence as a whole (including witness credibility) before making detailed findings of fact (not least because Mr Graham has helpfully provided 60 pages of submissions on the facts). But first I must decide the scope of the finding of fraud binding the parties by issue estoppel and given some pleading points, the procedural history must be detailed. Given all that, while HHJ Purle QC was elegantly concise in his judgment of only ten pages, despite my very best efforts but regrettably lacking HHJ Purle QC's gift for brevity, I eventually failed in my attempt to keep my own final judgment within thirty times that length.

10. So, it may assist the parties if I set out now the structure of my judgment. I will address the issues listed above, but in a different order in the following 'chapters' (for want of a less grandiose word):

(a) This Introduction: paragraphs 1-10

(b) Procedural History: paras.11-39

(d) Principles of Fact-Finding After Fraud Findings: paras.61-90

(e) Assessment of the Evidence: paras.91-140

(f) Findings of Fact: paras.141-319

(g) Undue Influence: paras.320-415

(h) Resulting Trust: paras. 416-445

(i) Conspiracy - Pleading, Scope and Limitation: paras.446-504

(j) Conspiracy - Merits and 'Unlawful Means': paras.505-565

(k) Remedies: paras.566-619

(l) Summary: paragraph 620

Procedural History

11. I touched on the procedural history of this litigation at paragraph 6 above. In most cases such a brief summary would do. However, as this is a retrial following an earlier judgment being set aside for fraud, indeed one raising complex issues of limitation with new causes of action, more detail is needed, especially in the light of the Defendants maintaining the stance that they did not forge the PSA, despite the findings in the Gasztowicz Judgment. At this stage, I will consider the original pleaded claim, HHJ Purle QC's findings in dismissing it; the Claimant's subsequent litigation with her own solicitors; the new expert evidence proving forgery of her signature on the PSA; the 2013 claim against the Defendants to set the Purle Judgment for fraud and its journey to the Supreme Court, the new 2015 allegations of deceit and conspiracy against Dr and Mrs Krishan; and the Gastozwicz Judgment in 2020 and since. However, I reserve until later my findings on the alleged acts of conspiracy in this period.

12. As I shall explain later in my findings of fact, this case concerns five properties in Foleshill in Coventry that from 2000-2006 were in the name of the Claimant:

12.1 The former Ritz Cinema in Longford Road, Coventry ('the Cinema');

12.2 The former Co-Op Emporium, 376-386 Foleshill Road ('the Co-Op')

12.3 554 Foleshill Road, Coventry

12.4 556 Foleshill Road, Coventry

12.5 558 Foleshill Road, Coventry.

554-558 Foleshill Road are terraced properties (at one stage they were knocked through to form one property) formerly used as shops and collectively known in this litigation as 'the Shops'. I shall refer to all these properties collectively as 'the Properties' and will describe them further in my findings of fact.

13. Whilst I will obviously return to those underlying facts later, for the moment, it suffices to note that all the Properties were transferred from the Claimant into the name of Gracefield in March-April 2006 and were all mortgaged and made subject to a debenture in December 2006. Dispute between the parties broke out in Spring 2008, after Dr and Mrs Krishan briefly put the Properties onto the market. The Claimant sought advice from a property consultant Mr Matthews, who after a meeting with the Second and Third Defendants in June 2008 suspected fraud as did the Claimant who brought a claim in October 2008.

14. Since the Defendants continue to rely on it before me and it was so central to the history, it is convenient at this stage to set out the PSA almost in full:

"THIS PROFIT SHARE AGREEMENT is made on 1 April 2006 BETWEEN Balber Takhar....('Mrs Takhar') of one part and Gracefield Developments Limited....('the company') of the other part.

WHEREAS...

(b) Mrs Takhar has sold 3 lots of properties to the company. The value placed on these properties is £100,000 which represents the value of compulsory purchase orders.

NOW THIS DEED WITNESSETH:

1. The company covenants with Mrs Takhar the following:

(a) The £100,000 purchase price of the properties shall be split... £30,000 - three residential properties [i.e. 'the Shops'];

£30,000 Ritz Cinema Site

£40,000 Former Co-Op Site.

This sum shall be placed on a loan account within the company and shall be paid to Mrs Takhar on the completion and sale of each site.

(b) Further sums shall be payable to Mrs Takhar which represent deferred consideration for an uplifted value of the properties at the time they were transferred to the company. Again these sums shall be payable on the completion and sale of each of the sites:

£60,000 - three residential properties (£20,000 each)

£60,000 - Ritz Cinema Site

£80,000 - Former Co-Op Site.

(c) Mrs Takhar shall also receive 50% of the profits on the sale of each site. The treatment of the payment of the profits will be discussed at the relevant time and take into account Mrs Takhar's personal taxation position.

B TAKHAR

FOR AND BEHALF OF GRACEFIELD DEVELOPMENTS LTD

DIRECTOR SECRETARY..."

(Curiously, the PSA did not mention what happened to the other 50% share).

15. The PSA was drafted by the Krishans' own accountant, whom I shall refer to as 'SB'. I make clear this is not because she did anything wrong, although she was accused by the Krishans before Mr Gasztowicz QC of the forgery (which he roundly rejected, finding it was the Krishans). In the Gasztowicz Judgment, he anonymised her and her firm with random letters, but to make this much longer judgment easier to follow, I have adopted her initials 'SB'. Whilst SB understandably did not participate in that trial before me in 2023 or him in 2020, she was a witness before HHJ Purle QC in 2010 and I will refer to her statement and evidence later, as an important part of the evidential material before me. Similarly, I will anonymise the Krishans' lawyers in 2008-2010, although again stress they did nothing wrong at all. Only the Krishans knew about their forgery.

16. On 24^th July 2008, the Claimant's then-solicitors, Challinors (who later settled her claim for negligence, as I shall describe) sent a letter before claim to Dr and Mrs Krishan which initially denied the Claimant's awareness of the company, contended they held the properties for the Claimant on trust and stated:

"Ultimately, our client alleges that you have defrauded her so as to obtain legal ownership of the Properties."

The letter invited Dr and Mrs Krishan to undertake not to dispose of or deal with the Properties. On 8^th August 2008, the Defendants' solicitors offered such an undertaking. However, on 10^th October 2008, the Defendants' then solicitors gave 14 days' notice to withdraw it as they wished to press on with their plans and invited the Claimant to issue a claim. On 24^th October 2008, the Claimant faxed the Defendants' solicitors setting out their case in detail and attaching a copy of the Claim Form. I will come back to that important letter later.

17. That Claim Form was issued on 24^th October 2008 under claim number 8BM30468 (which I will refer to as 'the Original Proceedings'). The Claim Form sought a declaration that Gracefield held the Properties on trust for the Claimant absolutely; and pleaded that the transfer had been procured by 'misrepresentation and/or undue influence' from Dr and Mrs Krishan. However, neither fraud, deceit, nor conspiracy were pleaded in that Claim Form. The Particulars of Claim followed on 19^th February 2009. However, the pleaded claim of misrepresentation was not pursued. Instead, the case was put alternatively in trust, contract, undue influence and unconscionable bargain. As the latter and contract are not pursued, undue influence is pursued on rather different bases and I return to the pleading of trust, I need not set that out.

18. The Defence and Counterclaim denied the Claimants' allegations and relied on the PSA in the following rather cryptic way at paragraph 29:

"An agreement was drafted...which was signed. Whilst the draft contained some of the terms of the agreement set out above, it did not in any event comprehensively deal with all that had been agreed...This agreement is headed Profit Sharing Agreement and is purportedly dated 1^st April 2006."

A counterclaim sought a declaration not quite in the same terms as the PSA, in that it sought a declaration that Gracefield was the legal and beneficial owner of the Properties and on their sale, after deduction of Gracefield's costs, the Claimant 'should be repaid her loan of £100,000', further £100,000 by way of deferred consideration (not £200,000) and that after those and Gracefield's expenses, both the Claimant and the Krishans between them should have 50% of the net proceeds of sale. Both Dr and Mrs Krishan signed a statement of truth.

19. The Reply and Defence to Counterclaim dated 9^th April 2009 included pleas that the Claimant signed the transfers without understanding the nature and effect of what she was signing, as Mrs Krishan represented them as merely administrative documents and added at Paragraph 13.6 of the Reply:

"The Claimant has received no consideration for the transfer of the Properties. In addition to the reasons set out in the Particulars of Claim, the First Defendant would hold the Properties on resulting trust for the Claimant by operation of law owing to this gratuitous transfer."

Curiously, the only reply to the cryptic comment in the Defence at paragraph 29 that the PSA 'was signed' was the equally cryptic response that 'The admission of an incomplete agreement is noted'. This is hardly a denial by the Claimant.

20. Following further interlocutory skirmishes, including an injunction restraining Gracefield and the Krishans from dealing with the Properties pending trial, three versions of the PSA were disclosed by the Defendants on 13^th July 2009: an unsigned version, an undated version signed by the Krishans and the version ostensibly signed by the Claimant which it was later found the Krishans forged. Well after the trial had been listed for July 2010, and indeed at least three months at the latest after she had received a copy of the PSA with her apparent signature, the Claimant made a belated application on 31^st March 2010 for handwriting expert evidence. Unsurprisingly, so close to that trial before himself and bearing in mind the Claimant was saying she could not remember signing the PSA, rather than saying that she did not do so, HHJ Purle QC refused that application.

21. At the trial itself before HHJ Purle QC in July 2010, the parties maintained their positions. The Claimant essentially said she did not recall signing it and in closing submissions, her Counsel accepted she did not allege forgery. The Krishans maintained their stance that she had signed and returned the PSA. In HHJ Purle QC's extempore judgment on 28^th July 2010 at [21]-[22], he accepted the Defendants' case and found that the Claimant signed the PSA:

"Mrs Takhar's case is she didn't sign [the PSA] at all and she has never seen the agreement until this dispute arose. However, no case of forgery is advanced. 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 signed away, which was returned, probably by her in some way, duly executed to [SB'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."

Whilst it is fair to say that HHJ Purle QC did not accept other aspects of the evidence of the Claimant and her son Sukhjinder (known as and whom I shall call 'Bobby'), having found she did execute and return the PSA to SB, it is hardly surprising that HHJ Purle QC rejected the Claimant's factual case. He went on to reject all her causes of action and dismiss her claim.

22. I will frequently return to parts of the Purle Judgment below and to some passages in the cross-examination of all three parties. For now, I note that Judge Purle QC during the trial intervened to prevent the Claimant's then-Counsel from cross-examining Dr Krishan on the basis that the agreement to transfer the Properties to the Third Defendant company was procured by misrepresentation - whether fraudulent (i.e. deceit) or even innocent and the Claimant's then-counsel accepted neither deceit nor misrepresentation had been pursued. It is now pursued before me, albeit no longer through the newly-pleaded tort of deceit, but as a different way of putting the originally-pleaded undue influence.

23. After HHJ Purle QC in 2010 ordered the Claimant to pay 80% of the Defendants' costs, in 2011 they set off £560,653.80 against her entitlement to the sale proceeds under the profit share HHJ Purle QC found, cancelling it out. To make matters worse, the Claimant's own solicitors Challinors in March 2011 sought possession of her own home which she had charged as security for their fees. Around the same time, the Defendants sold the Co-Op at auction for £675,000 and in May 2011 at auction the Shops were sold for £175,000.

24. When the Claimant was sued by Challinors for their fees, in October 2011, her Defence and Counterclaim alleged professional negligence, including failing to apply earlier for handwriting expert evidence. Challinors denied that, but that action settled by Tomlin Order on 22^nd January 2013 with a payment to be made from Challinors to the Claimant in the sum of £300,000 and she was excused from the outstanding costs of Challinors (who entered administration in August 2013). That £300,000 payment is important to the issue of remedies at the end.

25. In October 2013, the Claimant obtained a final handwriting report from expert Mr Radley (having obtained a preliminary one in October 2011 as part of her case with Challinors). As Newey J (as he was) explained in his decision later upheld in the Supreme Court: Takhar v Gracefield [2015] EWHC 1276 (Ch) ('the Newey Judgment') at [11], Mr Radley concluded that a letter signed by the Claimant on 24^th March 2006 'bore an original 'pen on paper' signature superimposable with the signature on the copy PSA', which was 'conclusive evidence that a copy of the original signature on the letter has been transposed by one of several simple processes onto the PSA'. Mr Radley also concluded that a 2011 banking account enquiry form was not signed by the Claimant, but was transposed from a 2006 account enquiry form, for which there was 'strong evidence' that the Claimant did not sign that either. Finally, Mr Radley also concluded there was 'limited positive evidence' that the Claimant did not sign the first page of a stock transfer form in the Third Defendant, although he described that as 'far from conclusive' and it could be an 'abnormal signature'.

26. On 20^th December 2013, the Claimant issued proceedings to set aside the Purle Judgment for fraud, relying on Mr Radley's report under claim number HC-2013-000172 ('the Set Aside Proceedings'). On 4^th March 2014, the Defendants' Defence denied that claims and contended the proceedings should be struck out as an abuse of process as the alleged fraud - primarily the forgery of her signature on the PSA - had been discoverable by her in the Original Proceedings - hence her late application for handwriting evidence in March 2010. The Claimant then sought permission to amend those new proceedings to allege deceit and conspiracy against Dr and Mrs Krishan. I note the Defendants finally sold the Ritz Cinema by auction for £191,000 in August 2014.

27. The Defendants' strike-out and the Claimant's amendment applications were heard by Newey J in February 2015 and determined in the Newey Judgment. He decided that it was unnecessary for a party seeking to set aside a judgment for fraud to show that it could not have been discovered before the judgment with reasonable diligence. Newey J also refused permission to the Claimant to amend so as to add claims of deceit and conspiracy, essentially because he considered there was an arguable limitation defence and that those did not 'arise out of substantially the same facts' as the 2008 proceedings under CPR 17.4.

28. However, on 5^th March 2015 the Claimant issued a fresh action against Dr and Mrs Krishan for Deceit and Conspiracy as case number HC-2015-000788 ('the Deceit/Conspiracy proceedings'). That date is crucial for the limitation issues on the remaining conspiracy claim. It is accepted that for it, the limitation period under s.2 Limitation Act 1980 is six years 'from the date on which the cause of action accrued'. That means conduct prior to 5^th March 2009 is time-barred subject to the Claimant's limitation arguments, including s.32 Limitation Act. The Defendant's Defence to this new action obviously raised this limitation point.

29. As the Claimant later amended her pleading of conspiracy and deceit and no longer pursues the latter, I need not detail pleading of either in 2015. But in short, the deceit was pleaded as knowingly false representations that (i) the Properties were subject or likely to be subject to Compulsory Purchase Orders ('CPO's) (when they were not); (ii) that as a result they were 'worthless' or only worth £100,000 in total (when a CPO entitles an owner to market value); (iii) that if without CPOs, they would be worth £300,000 in total (when in fact they were worth over £1 million collectively); and (iv) if the Claimant agreed to transfer the Properties to Gracefield, that the Krishans would ensure the CPOs or threat of them were removed and the Properties were refurbished and managed for the Claimant's benefit as an 'act of charity'. Conspiracy was summarised:

"From the beginning of 2005, the First and Second Defendants wrongfully conspired, combined together and agreed that they would by unlawful means: (i) procure the transfer of the Properties to a new company (which in the first instance was to be jointly owned by the Claimant and Defendants and which was in the event incorporated under the name of Gracefield Developments Ltd ('Gracefield')); (ii) obtain control of Gracefield; (iii) extract all alternatively most of the equity in the Properties for their own benefit; (iv) hide the misconduct by exaggerating the costs of managing the Properties and by forging documents."

30. As summarised in the Supreme Court in Takhar, the Defendants appealed the dismissal of their abuse of process argument in the Newey Judgment. Permission was granted and the appeal heard by the Court of Appeal in December 2016. In their judgment of 21^st March 2017, the Court allowed the appeal on the basis that a judgment could not be set aside for fraud which had been discoverable with reasonable diligence beforehand. On foot of that decision, the Defendants issued bankruptcy proceedings against the Claimant based on the balance of their costs.

31. However, in the meantime the Supreme Court heard the Claimant's appeal in October 2018 and on 20^th March 2019, the Court handed down its unanimous decision. I will return to passages in it in more detail below, but for now I simply quote the headnote from the Appeal Cases report ([2020] AC 450) that:

"[W]here it could be shown that a judgment had been obtained by fraud and no allegation of fraud had been raised at the trial which led to that judgment, a party seeking to set aside the judgment was not required to show that the fraud could not with reasonable diligence have been uncovered in advance of the obtaining of the judgment; therefore, absence of reasonable diligence was not of itself a reason for staying as an abuse of process a claim to set aside a judgment on the grounds of fraud; and accordingly, the claimant's claim to set aside the judgment was not an abuse of process and [the Newey Judgment] refusing the defendants' application would be restored ."

32. The Supreme Court's decision opened the door to the trial of the Set Aside Proceedings before Mr Gasztowicz QC from 9^th-11^th September 2020. On 23^rd October 2020, he handed down the Gasztowicz Judgment. This is surprisingly unreported given that it resolves a tension in the precise test for setting aside and again, I will return to that point and other specific findings in this case below. However, for now the kernel of his decision was three-fold. Firstly, at [74] following the handwriting experts' joint view that it was inconclusive whether the bank account form in 2006 and 2011 had been forged, he found that they had not been forged. Secondly, at [64]-[65] following the handwriting experts' joint view that the Claimant's signature on the copy PSA had been forged, that was no longer disputed. Thirdly, he rejected the Krishans' argument that SB or her firm had forged the PSA signature, concluding at [126]-[127]:

"I am satisfied, on the balance of probabilities, that not only did the Defendants have strong motive, and opportunity, to forge the document by transposition of the Claimant's signature onto it from elsewhere (and that there is no evidence or sufficient reason to think that anyone at [SB's firm] did so), but that they did do so. Based on all the evidence I have heard, the Defendants were in my judgment, on the balance of probabilities, responsible for the forgery of the signed profit sharing agreement document by adding the Claimant's signature to a copy of it by transposition from [a] letter. This amounted, in the words of Aikens LJ in RBS, to "conscious and deliberate dishonesty"."

Mr Gasztowicz QC went on to find that this forgery was 'material' to the Purle Judgment (and accordingly that it should be set aside), stating at [137]:

"In any trial, and in a fraud trial in particular, the court is of course looking for independent and contemporaneous indicators of where the truth lies on crucial issues, such as in this case, whether there was a profit sharing (or "joint venture") agreement. The forged document clearly evidenced this in the absence of forgery of Mrs Takhar's signature on it. Had the Judge known that her signature on the copy of that before him had been forged, for which the Defendants were responsible (causing him also to weigh their oral evidence in the light of that knowledge), that plainly would have (in the words of Aikens LJ in RBS) 'entirely changed the way in which the first court approached and came to its decision' and it was plainly an 'operative cause of the court's decision to give judgment in the way that it did'...."

As a result, in Mr Gasztowicz QC's costs judgment [2020] Costs LR 1851, he ordered the Krishans to pay (i) indemnity costs of the Set Aside Proceedings; (ii) the Claimant's costs of the Original Proceedings on the indemnity basis with interest; and (iii) the Krishans' costs in the Original Proceedings she paid, he ordered to be £363,975.60, even though she contended they were £560,653.60.

33. Following those decisions (neither appealed by the Defendants), on 21^st July 2021, DJ Malek (as he then was) ordered by consent consolidation of the re-opened Original Proceedings with the Deceit/Conspiracy Proceedings. The Claimant in her Consolidated Reply dated 17^th December 2021 argued at paragraph 22a that the limitation period for the deceit and conspiracy claims was 'rewound' to the start of the Original Proceedings on 24^th October 2008 as 'relation back' under s.35 Limitation Act 1980. Mr Halkerston initially relied on the cases of Arab Monetary Fund v Hashim (No.4) [1992] 1 WLR 553 and Freemont Insurance v Freemont Indemnity [1997] CLC 1428. However, in a powerful riposte under time pressure before trial, Mr Graham and Mr Perring's Limitation Skeleton pointed out that both cases really concerned the pre-CPR 'use' of consolidation to engage the court's discretion to extend validity of a claim form to 'serve out' the jurisdiction. More relevant are Chandra v Brooke North [2013] EWCA Civ 1559 and Burton v Bowdery [2017] EWHC 208 (Ch) which held that where a court refuses permission to amend (as Newey J did here in March 2015), a claimant's remedy is to issue fresh proceedings (as the Claimant here then did), where limitation could be determined at trial. I would have agreed that is the situation here. However, wisely, Mr Halkerston did not pursue 'relation back' in closing submissions and I will say no more about it. Indeed, as I shall describe, the Claimant made further concessions on limitation.

34. In accordance with DJ Malek's order, on 3^rd September 2021, the Claimant filed and served her Consolidated Amended Particulars of Claim ('CAPOC'), which substituted for the Particulars of Claim in both the Original Proceedings and Deceit/Conspiracy Proceedings. Save on resulting trust and conspiracy, there were no substantial changes in the contours of the originally-pleaded claims and so I can summarise the pleaded allegations relatively briefly:

34.1 Firstly, it was pleaded in similar terms as in the Deceit/Conspiracy Proceedings that Dr and Mrs Krishan made knowingly or recklessly false representations to induce the transfer of the Properties to Gracefield, namely that they were subject to CPOs, were worthless or limited to £100,000, that without CPOs they were worth £300,000; and if transferred, they would ensure the CPOs or threat of them would be removed as an act of charity, when as experienced property developers they knew those were false. However, in paragraphs 45-47 CAPOC, the deceit claim was specifically limited to representations before transfer in March-April 2006.

34.2 Secondly, it was pleaded in similar terms to the Original Proceedings that the transfer of the Properties was procured by Undue Influence. Whilst there appears to be a typo in paragraph 48, on proper reading of paragraphs 10-14, 19-20 and 48-49 CAPOC this claim relies on two limbs. First, those allegedly false representations are allegations of 'actual undue influence'. Second, the alleged emotional and financial vulnerability of the Claimant and her reposing of trust and confidence in her cousin Mrs Krishan and husband Dr Krishan and that the transfers of the Properties at an alleged undervalue without independent legal advice is put as an allegation of 'presumed undue influence'. In any event, there is no need to plead them formally separately: Annulment Funding v Cowey [2010] EWCA Civ 711.

34.3 Thirdly, it is pleaded in similar terms to the Original Proceedings that the transfer of the Properties was an unconscionable bargain. However, following the evidence, Mr Halkerston confirmed that was not pursued. Given the rarity in success of that claim (which turns on the terms of the agreement itself, rather than any inducement for it), it is difficult to see how it could have succeeded if undue influence did not. Indeed, it appeared flatly contrary to the Claimant's main pleaded case in contract.

34.4 Fourthly, the pleaded case in contract, similarly to the Original Proceedings, is that the Claimant and Defendants expressly agreed to the transfer of the Properties to Gracefield on what might be called a 'custodial' basis to protect the Claimant from liability under a CPO. It was also alleged various express and implied terms of that agreement were breached by the Defendants. After the evidence, the Claimant abandoned that claim (which was unsupported by any contemporary documents and flatly contradicted by many). However, I return to it in assessing the Claimant's credibility.

34.5 Fifthly, despite the clearly-pleaded claim in the Original Proceedings for express/constructive trust (in direct alternative to the pleaded contract) and resulting trust (on the basis of gratuitous transfer) in the Reply, the pleaded claim in trust in the CAPOC is somewhat Delphic, stating that Gracefield held all the Properties on trust for her absolutely on the basis at para.50:

"Further or alternatively, and without prejudice to the relief sought in the foregoing, it is averred that by reason of the terms of the Agreement, Gracefield held the Properties pursuant to an express, alternatively, an implied trust for the benefit of the Claimant...."

This pleading (again, not Mr Halkerston's drafting) is not a model of clarity. The Defence denied the substance of that claim. However, in seeking to 'cover the bases', in their main Skeleton Argument, Mr Graham and Mr Perring denied express trust (as it was not in writing as required by s.53 Law of Property Act 1953) and common intention constructive trust (on the basis there was no common intention in the terms of the Claimant's pleaded 'Agreement' i.e. her claimed contract in trust form). After the evidence, Mr Halkerston confirmed that he did not pursue either of these points. However, he did pursue a resulting trust, which was pleaded in the Original Proceedings and which Mr Graham and Mr Perring had also discussed in their Skeleton, even though it was not mentioned in Mr Halkerston's own. Mr Graham and Mr Perring raised various objections to this, which I will address in more detail below in the 'chapter' of this judgment on resulting trusts. As I will explain, I am satisfied resulting trust is sufficiently pleaded.

34.6 Finally, the pleading of conspiracy is not entirely clear at para. 41 CAPOC:

"It is averred that the Krishans' actions referred to at paragraphs 9-40 above constituted an unlawful means conspiracy, in that the Krishans conspired and combined by unlawful means to (a) procure the transfer of the Properties to Gracefield......(b) obtain control of Gracefield; (c) extract all, alternatively most of the equity in the Properties for their own benefit; and (d) disguise their misconduct and mislead the Court, by exaggerating the costs of managing the Properties and forging documents, and thereby procuring judgment in the Original Claim in their favour."

In the Defence at paragraph 41(b), it was pleaded that:

"The composite reference to paragraphs to paragraphs 9 to 40 is inadequate to plead a claim in conspiracy. Many of these paragraphs do not refer to actions of Dr and Mrs Krishan at all and the plea that such of those paragraphs that do comprise allegations of 'actions' 'constituted' a conspiracy is legally nonsensical. If Mrs Takhar wishes to allege that unlawful acts were carried out by Dr and Mrs Krishan, they must be pleaded with specificity."

In response in the Claimant's Reply at paragraph 21, the 'unlawful means' relied on were specified by reference to particular paragraphs of CAPOC: (a) fraudulent misrepresentations intended to procure the transfers of the Properties at paragraphs 10-13, 21-22, 29-32 and 45 CAPOC; (b) undue influence at paragraphs 13, 17-21 and 23 CAPOC; (c) breaches of the Agreement at paragraphs 21-32 and 52-53 CAPOC and also '(d) the fraudulent concealment of their dishonest and unlawful actions as aforesaid, as set out at paragraphs 34-37 CAPOC'. I will expand on that last point in the chapter dealing with the 'scope and limitation' of the conspiracy claim. In short, I will find that not only was conspiracy adequately pleaded (at least as it has been narrowed), it was also properly 'put' in cross-examination.

35. In their Amended Defence of 22^nd October 2021, the Defendants denied all these claims. As their positive case remains in essence that which they originally pleaded and Judge Purle QC accepted, their position can be summarised briefly:

35.1 Firstly, that the Krishans made no false representations and were simply trying to help the Claimant. The Properties were only worth £300,000 in total as they were in poor condition. The Claimant requested them to help given her own beliefs about the 'worthlessness' of the properties, the risk of CPOs and of bankruptcy. Insofar as they may have agreed with her, they simply meant she would be unlikely to receive anything once her liabilities were discharged, as they proceeded on the assumption that CPOs would not be made. The Defendants averred that they told the Claimant they would help her to try and preserve, manage and develop the Properties and agreed with her suggestion that a new company should be formed to do so. They then agreed with her that the consideration for the transfer would be £300,000, with £100,000 initially and a further £200,000 when they were sold, along with 50% of the balance of sale proceeds (with 50% to the Krishans along with refund of funds they supplied to the company to pay costs of development). This agreement then led to the incorporation of Gracefield and was then discussed and formalised in the PSA.

35.2 Secondly, that there was no undue influence. They averred that it was the Claimant's belief that she would be rendered homeless and penniless due to her financial problems and the Claimant who pleaded with them to help, which they did, but that at all times she was acting under her own volition. Moreover, the Claimant was advised by the Defendants' solicitor Mr Whiston to seek independent legal advice and she decided not to do so.

35.3 Thirdly, that the agreement in the terms reflected in the PSA was primarily for the Claimant's benefit and not an unconscionable bargain.

35.4 Fourthly, that there was no agreement as pleaded by the Claimant for Gracefield to have 'custody' of the Properties on her behalf, nor any breach of any express or implied terms.

35.5 Fifthly, for similar reasons, there was no trust in favour of the Claimant.

35.6 Finally on conspiracy, all the limbs of that claim were denied. In particular, there were no false representations as alleged or at all either before or after the transfers and no forgery (save of the Claimant's signature on the PSA in respect of which the Defendants were bound by the Gasztowicz Judgment). It was also pleaded that save as to that Judgment, they are entitled to contend that the profit share agreement was oral and was beneficial to the Claimant. Accordingly, the conspiracy claim was denied.

35.7 Seventhly, the Amended Defence contended that the Claimant had suffered no loss. The Properties were sold at auction in 2011/2014 at market value and set off the Claimant's share against the costs order in their favour in the Purle Judgment. Without the agreement, the Claimant would have been in a worse financial position. It was averred she would not have been able to rent out the Properties, nor to restore them or to afford planning permission and would have sold them for the same or less.

35.8 Finally, limitation was re-iterated for the deceit and conspiracy claims.

36. On 17^th December 2021, the Claimant filed and served a Reply. This denied the Defendants' asserted factual case, effectively maintaining her own case. It did not respond on the trusts point, but as quoted above, did 'unpack' the conspiracy claim and respond to the pleading points, including at paragraph 10 by specifically pleading that if the 'agreement' were that pleaded by the Defendants, it was procured by the false representations as pleaded in the CAPOC as summarised above. On limitation, other than the 'relation back' point, the Claimant relied on s.32 Limitation Act contending fraud/concealment could only have been discovered with the handwriting report in 2013.

37. In terms of further case management, on 27^th April 2022 at CCMC, DDJ Caun made directions approving the Claimant's cost budget in the sum of £481,419 and the Defendant's cost budget in the sum of £533,534. DDJ Caun made standard directions (subsequently extended by consent) for disclosure and witness statements and granted permission for expert valuation evidence (which only the Claimant obtained). The original time estimate was 5 days.

38. However, on 30^th January 2023 at a Pre-Trial Review before myself, the parties agreed 8 days were needed and I extended the trial window to the end of July 2023. However, in the event, limited party availability meant the trial was listed for December 2023. As I said, the Defendants changed legal teams and Counsel two weeks before. The 8 days set down for trial proved insufficient because the Claimant's evidence took 2½ days rather than 1 day, as I explain below. As a result, we agreed to go part-heard for two days for submissions in January 2024, which as I say meant the parties were able to reflect and research further.

39. On the Friday before submissions started on Monday 8^th January, the Claimant narrowed the issues. In addition to concessions on various costs and expenses, the Claimant abandoned her claims in contract, unconscionable transaction and deceit. She maintained her claims in resulting trust, undue influence (including 'fraudulent misrepresentation' which is why deceit was not separately pursued). She also maintained her claim in conspiracy, but limited in the following way:

"....based upon the Defendants' actions taken after the commencement of claim 8BM30468 [i.e. the Original Proceedings] to procure judgment in their favour and to mislead the Claimant and the Court .....[and] no arguments will be made as to the effect of section 32 of the Limitation Act other than to the extent relevant to the conspiracy claim as explained..."

In the course of my preparation for the resumed trial, I had also come across several authorities which seemed to me relevant and asked my clerk to inform the parties of them. Two of them - the November 2023 judgment of Foxton J in Lakatamia v Lakatamia & Morimoto [2023] EWHC 3023 (Comm) at [79] referring to Willers v Joyce [2016] UKSC 43 – went to the heart of whether the tort of unlawful means conspiracy could encompass 'dishonest defence of civil proceedings' on which the Claimant seemed now to be focussing her conspiracy claim. I will come back to the scope of the conspiracy claim later, but in essence it now really turns on whether the Krishans' forgery of the PSA deployed in the Original Proceedings was 'unlawful means'. That likewise turns on the findings not just of myself, but in the Purle Judgment and Gasztowicz Judgment, which raises the question of res judicata and issue estoppel, to which I now turn.

Res Judicata After Setting Aside a Judgment for Fraud

Principles

40. There was some discussion at trial about the extent to which (if at all) I was bound by findings in the Purle Judgment and Gasztowicz Judgment, especially the finding the Krishans had forged the Claimant's signature on the PSA. Mr Graham and Mr Perring called it a 'juridical fact', but Mr Halkerston contended it gave rise to an issue estoppel on the now-narrowed conspiracy claim. Since it is now the centrepiece of that claim, I consider it now in some detail. There is an obvious interface between the two common law doctrines of setting aside a judgment for fraud and Res Judicata. However, fortunately, the leading case on that interface is the Supreme Court Takhar judgment and I will focus mainly on Takhar and Virgin Atlantic v Zodiac Seats [2014] AC 160, but also the Privy Council decision in Finzi v Jamaican Redevelopment [2024] 1 WLR 541. This 'chapter' addresses two follow-on consequences of those principles after a judgment has been set aside for fraud. First, to what extent, if at all, do findings in a judgment later set aside for fraud unaffected by it survive ? Second, to what extent, if at all, are the parties bound by any findings in the later 'set-aside judgment' - in other words does set-aside take the parties 'back to square one' ? These questions were not directly considered by the Supreme Court in Takhar or Virgin, nor in the only case I found which cites them both (itself an unsuccessful set-aside application): Longe v Bank of Scotland [2019] EWHC 3540 (Ch). Nevertheless, I consider the answers are clear from those authorities.

41. I turn first to Lord Sumption's summary in Virgin at [17] (also quoted in Longe) of the various strands of res judicata, although I limit it to the three relevant here: cause of action estoppel, issue estoppel and 'Henderson' abuse of process by re-litigation (I need not deal with merger of a successful cause of action in judgment nor the related rule in Conquer v Boot, but I will return to the broader 'Principle of Finality' towards the end of this judgment at paragraphs 545-550):

"Res judicata is a portmanteau term which is used to describe a number of different legal principles with different juridical origins. As with other such expressions, the label tends to distract attention from the contents of the bottle. The first principle is that once a cause of action has been held to exist or not to exist, that outcome may not be challenged by either party in subsequent proceedings. This is 'cause of action estoppel'. It is properly described as a form of estoppel precluding a party from challenging the same cause of action in subsequent proceedings.....[Next], there is the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties...'Issue estoppel'....[Last], there is the principle first formulated by Wigram V-C in Henderson v Henderson (1843) 3 Hare 100, 115, which precludes a party from raising in subsequent proceedings matters which were not, but could and should have been raised in the earlier ones...."

42. It is in the light of those definitions Lord Sumption had given a few paragraphs earlier at [17] of Virgin that his summary at [22] (quoted by Lord Kerr in Takhar) of the principles of cause of action estoppel and issue estoppel must be read:

"Arnold v National Westminster Bank plc [1991] 2 AC 93 is accordingly authority for the following propositions. (1) Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action. (2) Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or non-existence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised. (3) Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised."

43. However, this possibility of issue estoppel on a point not raised (without reasonable diligence) in earlier proceedings creates overlap to an extent with 'Henderson abuse of process', since each can apply to a point not raised in earlier litigation. But that does not mean issue estoppel has now 'swallowed up' Henderson abuse of process. On the contrary, in Virgin at [23]-[26], Lord Sumption emphasised the two doctrines were different, as he explained at [26]:

"Res judicata and abuse of process are juridically very different. Res judicata is a rule of substantive law, while abuse of process is a concept which informs the exercise of the court's procedural powers. In my view, they are distinct although overlapping legal principles with the common underlying purpose of limiting abusive and duplicative litigation. That purpose makes it necessary to qualify the absolute character of both cause of action estoppel and issue estoppel where the conduct is not abusive."

Issue estoppel bites where a point necessarily common to both proceedings either had been raised and decided in a valid judgment in earlier proceedings with a different cause of action between the same parties or their privies, or 'usually' where it was not raised and could with reasonable diligence and should have been raised. By contrast, Henderson abuse of process is rather more flexible and of wider application on a 'broad merits-based' approach explained by Lord Bingham in Johnson v Gore Wood [2002] 1 AC 1 at [31] (quoted in Virgin at [24]):

"Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive...

[T]here will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been...to render raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before."

44. Having pinned down the different concepts of cause of action estoppel, issue estoppel and Henderson abuse of process, I now turn to their interface with the doctrine of setting aside a judgment for fraud central to this whole litigation. In Takhar, Lord Sumption again explained how all those doctrines fitted together at [61]-[63] (my underline), having explained at [60] that setting aside for fraud is not a procedural application but itself a free-standing cause of action:

".....[61] The cause of action to set aside a judgment in earlier proceedings for fraud is independent of the cause of action asserted in the earlier proceedings. It relates to the conduct of the earlier proceedings, and not to the underlying dispute. There can therefore be no question of cause of action estoppel. Nor can there be any question of issue estoppel, because the basis of the action is that the decision of the issue in the earlier proceedings is vitiated by the fraud and cannot bind the parties... If the claimant establishes his right to have the earlier judgment set aside, it will be of no further legal relevance qua judgment. It follows that res judicata cannot therefore arise in either of its classic forms.

[62] The rule...in Henderson...that a party is precluded from raising in subsequent proceedings matters which were not but could and should have been raised in the earlier ones, is commonly treated as a branch of the law of res judicata.......[W]here a question was not raised or decided in the earlier proceedings but could have been, the jurisdiction to restrain abusive re-litigation is subject to a degree of flexibility which reflects its procedural character. This allows the court to give effect to the wider interests of justice raised by the circumstances of each case.

[63] It is this flexibility which supplies the sole juridical basis on which the defendants can argue that the evidence of fraud must not only be new, but such as could not with reasonable diligence have been deployed in the earlier proceedings. It is also the basis on which Lord Briggs JSC, in his judgment on the present appeal, suggests a less absolute rule...I cannot accept either the defendants' argument, or Lord Briggs JSC's more moderate variant...[P]roceedings of this kind are abusive only where the point at issue and the evidence deployed in support of it not only could have been raised in the earlier proceedings but should have been: see Johnson.... Lord Bingham observed...it is 'wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive'. The 'should' in this formulation refers to something... the law would expect a reasonable person to do in his own interest and...the efficient conduct of litigation. However, the basis on which the law unmakes transactions, including judgments..procured by fraud is a reasonable person is entitled to assume honesty in those with whom he deals. He is not expected to conduct himself or his affairs on the footing that other persons are dishonest unless he knows that they are. That is why it is not a defence to...deceit to say that the victim of the deceit was foolish or negligent to allow himself to be taken in...It follows that unless on the earlier occasion the claimant deliberately decided not to investigate a suspected fraud or rely on a known one, it cannot be said that he 'should' have raised it."

However, in Finzi Lord Leggatt clarified that if the evidence of fraud had actually been obtained by the party who did not deploy it at the original trial, as opposed to obtainable, but not actually obtained by that party until after the judgment like Takhar, their claim to set aside the judgment for fraud may be an abuse of process.

45. The sentence I have underlined in [61] raises one of the consequential questions I must consider: the status of a set-aside judgment on a retrial. However, the answer in part turns on the test for setting aside approved obiter, by the Supreme Court in Takhar (Lord Sumption at [67] and Lord Kerr at [56]) of Aikens LJ in Royal Bank of Scotland plc v Highland Financial [2013] 1 CLC 596, para 106:

"[F]irstly, there has to be a 'conscious and deliberate dishonesty' in relation to the relevant evidence given, or action taken, statement made or matter concealed, which is relevant to the judgment now sought to be impugned. Secondly, the relevant evidence, action, statement or concealment (performed with conscious and deliberate dishonesty) must be 'material'. 'Material' means that the fresh evidence that is adduced after the first judgment has been given is such that it demonstrates that the previous relevant evidence, action, statement or concealment was an operative cause of the court's decision to give judgment in the way it did. Put another way, it must be shown the fresh evidence would have entirely changed the way in which the first court approached and came to its decision. Thus, the relevant conscious and deliberate dishonesty must be causative of the impugned judgment being obtained in the terms it was. Thirdly, the question of materiality of the fresh evidence is to be assessed by reference to its impact on the evidence supporting the original decision, not by reference to its impact on what decision might be made if the claim were to be retried on honest evidence."

46. This was the test Mr Gasztowicz QC applied, in preference to the test of materiality in Hamilton v Al-Fayed [2001] EMLR 15 at [34], favoured but not adopted by Sir Terence Etherton MR in Salekipour v Parmar [2018] QB 833 (which was decided before the Supreme Court in Takhar endorsed Highland):

"[If] clearly established by fresh evidence that the court was deliberately deceived in relation to the credibility of a witness, a fresh trial will be ordered where there is a real danger...this affected the outcome of the trial."

Sir Terence Etherton MR said in Salekipour at [93]:

"I am inclined to agree...that the test was over-stated in the Royal Bank of Scotland case and that the proper approach is that laid down by the Court of Appeal in the Hamilton case."

That test of materiality is a substantially lower threshold than in Highland.

47. However, in the Gasztowicz Judgment at [33]-[61], Mr Gasztowicz QC showed how Aikens LJ's formulation in Highland had been endorsed by all the Justices in Takhar despite both Hamilton and Salkeipour being cited to them in argument. He also pointed out that contrary to the tentative view in Salekipour, the Highland test was indeed perfectly consistent with Lady Hale's analysis in Sharland v Sharland [2016] AC 871, which concerned an (approved but unsealed) consent order obtained by fraud. Just as Aikens LJ had in Highland, Lady Hale in Sharland had held fraud leading to a consent order would not be 'material' justifying the order being set aside if the court would not have made a significantly different order had it been aware of the fraud at the time of making it. Mr Gasztowicz QC also found Highland to be consistent with the Supreme Court's approach to materiality where a civil settlement not by order is obtained by fraud in Zurich Insurance v Hayward [2017] AC 142, as Highland only required fraud to be 'an' operative cause of judgment, not 'the' operative cause'.

48. I respectfully agree with Mr Gasztowicz QC's analysis favouring Highland, both for the reasons he gave and also because of the underlying policy reason why Lord Sumption in Takhar at [67] endorsed Aikens LJ's formulation in Highland:

"I recognise the risk of frivolous or extravagant litigation to set aside judgments on the ground of fraud, but like other members of the court, I think that the stringent conditions set out by Aikens LJ in [Highland]..., combined with the professional duties of counsel, are enough keep it within acceptable limits. I do not think that the imposition of further conditions would be consistent with the long-standing policy of equity of reversing transactions procured by fraud."

So, whilst approval of Highland was technically obiter in Takhar, it was actually part of Lord Sumption's process of reasoning in rejecting the requirement that fraud would not have been discoverable with reasonable diligence. The 'stringent conditions' in Highland, including that the fraud must have been causative of the judgment result meant that such a 'further condition' would be unnecessary and inconsistent with equity's policy. So to water down materiality with the Hamilton test that fraud need not be proven to be causative of the result, provided there is a 'real danger' that it influenced the outcome (at least where that fraud had been discoverable with reasonable diligence at the time), would undermine the strict limits on the doctrine the Court in Takhar envisaged would apply. Moreover, following Takhar, in Dale v Banga [2021] EWCA Civ 240 the Court of Appeal also proceeded on the basis that the test for setting aside a judgment (as opposed to on appeal) was that in Highland whilst also mentioning Salekipour on a different point. The same conclusion was reached by the Privy Council in Finzi.

49. However, this causative test of materiality of fraud in Highland endorsed in Takhar then raises the first consequential question I must resolve. If a judgment is only liable to be set aside if the fraud was an operative cause of that judgment being in the terms it was, what about any terms of (and findings in) that judgment which were entirely unaffected by the fraud ? What if the original action raised several causes of action and the fraud was only fatal to some of them, but another cause of action failed for reasons wholly unrelated to the fraud - would that create any sort of Res Judicata at the retrial following the judgment being set aside ? This raises the question of the status of some of the findings in the Purle Judgment

Does fraud always 'unravel all' ? The status of the Purle Judgment

50. I repeat the sentence I underlined above by Lord Sumption in Takhar at [61]:

"If the claimant establishes his right to have the earlier judgment set aside, it will be of no further legal relevance qua judgment."

This strict approach to the effects of proven fraud is consistent with the underlying policy of the law that 'fraud unravels all', discussed by Lord Kerr in Takhar at [43]-[53], starting with a quote by Lord Bingham in HIH Casualty Insurance Ltd v Chase Manhattan Bank [2003] 1 All ER (Comm) 349 at [15]:

"Fraud is a thing apart. This is not a mere slogan. It also reflects an old legal rule that fraud unravels all . . . Once fraud is proved, 'it vitiates judgments, contracts and all transactions whatsoever': Lazarus Estates Ltd v Beasley [1956] 1 QB 702, 712 per Denning LJ. Parties entering into a commercial contract will no doubt recognise and accept the risk of errors and omissions in the preceding negotiations, even negligent errors and omissions. But each party will assume the honesty and good faith of the other; absent such an assumption they would not deal."

This is also consistent with the stringent approach of Lord Buckmaster in Jonesco v Beard [1930] AC 298,300-301, part-quoted by Lord Kerr in Takhar at [47]:

"The proper method of impeaching a completed judgment on the ground of fraud is by action in which, as in any other action based on fraud, the particulars of the fraud must be exactly given and the allegation established by the strict proof such a charge requires....That, however, there is jurisdiction in special cases to set aside a judgment for fraud on [appeal with] a motion for a new trial may be accepted...[H]owever...the necessity for stating the particulars of the fraud and the burden of proof are no whit abated and all the strict rules of evidence apply....Fraud is an insidious disease, and if clearly proved to have been used so that it might deceive the Court, it spreads to and infects the whole body of the judgment."

51. Notwithstanding that, there does appear to be jurisdiction for the Court to set aside part of a judgment for fraud, as Lord Brown said in the Privy Council case of Boodoosingh v Ramnarace [2005] 4 LRC 240 (albeit Jonesco was not cited). That was a case where the plaintiff had been shot by the defendant and won his claim for damages for assault. The unsuccessful defendant both appealed and brought a fresh action to set that judgment aside for fraud (namely alleged perjured evidence of his loss of earnings). The Court of Appeal of Trinidad and Tobago in separate decisions dismissed the appeal on the basis the new evidence was equivocal and then stayed the fresh action pending further appeal of its first decision to the Privy Council. Dismissing that further appeal, Lord Brown said at [18] and [27]:

"[18] There is no doubt that a judgment obtained by fraud can be set aside either by order made in a fresh action brought in fraud to impeach it or on appeal to the Court of Appeal by adducing fresh evidence sufficient to establish the fraud....Certainly, an appeal rather than a fresh action in fraud is the appropriate course where part only of a judgment is being impugned. A fresh action, if well-founded, is apt to set aside a judgment. Their Lordships know of no case, however, in which it has served some lesser purpose, say a reduction in the damages award...[my underline]....

[27] Even were the appellant on this appeal able to demonstrate to the necessary standard of proof that the respondent to some extent deliberately inflated his loss of earnings claim, their Lordships conclude that it would not be right to set aside the entire judgment. So far as the issue of liability was concerned, this was not, it must be observed, a close run case...."

52. This principle would appear to be unaffected by the advent in England and Wales of liability to lose the right to judgment for a proven personal injury claim if tainted with 'fundamental dishonesty' under s.57 Criminal Justice and Courts Act 2015: relating to the position where fraud is proven before judgment, not after. In my own judgment, Boodoosingh is also reconcilable with the reaffirmation of Jonesco in Owens v Noble [2010] 1 WLR 2491, where the Court of Appeal held a judgment could either be set aside for fraud by fresh action or by appeal, but only on appeal if either the Court of Appeal found fraud was admitted or incontrovertible, or ordered a separate remitted hearing of the fraud issue under CPR 52.10 (an 'Owens v Noble hearing'). I note that in Dale at [42], Asplin LJ adopted a test closer to Hamilton rather than Highland test for when the Court of Appeal will order a 'Noble v Owens hearing', but that is consistent because it is a 'filter' rather than a finding of fraud. Despite reference to Lord Sumption's comment in Takhar at [61] I set out, Asplin LJ in Dale at [54] left open the possibility of a 'conditional order' for only part of a judgment to be set aside for fraud. Given Boodoosingh (that was not cited), that course seems open on appeal either for admitted or incontrovertible fraud, or at an 'Owens v Noble hearing'.

53. However, it is equally clear from Boodoosingh and Lord Sumption's comment at [61] of Takhar that where the judgment is set aside for fraud by fresh action, as here, the whole judgment 'will be of no further legal relevance qua judgment'. That applies here to the whole of the Purle Judgment. That plainly means neither cause of action nor issue estoppel can bite on it. In any event, even if it were theoretically possible for findings in a judgment set aside for fraud unaffected by fraud to survive (which I find it is not), the whole of the Purle Judgment is 'infected' by fraud (to use Lord Buckmaster's phrase in Jonesco). As HHJ Purle QC made clear in his judgment at [32], he saw the case as turning on the facts and in particular his acceptance of the Krishans' factual account and rejection of the Claimant's. Since, as Mr Gasztowicz QC found at [134]-[137] of his judgment that the forged PSA was a key part of Judge Purle QC's overall factual reasoning, it is clear no causes of action failed independently of the fraud. In those circumstances, the Claimant re-running the original causes of action cannot possibly amount to a Henderson abuse of process either (it hardly amounts to 'unjust harassment' of the Defendants in Lord Bingham's phrase in Johnson). The bringing of new claims which could and should have been brought originally which are unaffected by the fraud found (e.g. the claim in deceit about the earlier alleged fraudulent misrepresentation which HHJ Purle QC made clear wa not before him) might amount to a Henderson abuse of process, but that is not argued by the Defendants who prefer to defend it on the merits and on limitation.

54. Nevertheless, whilst the Purle Judgment is 'of no further legal relevance as a judgment', it remains forensically relevant, if not quite in the same way as a valid earlier judgment in a later trial in the same litigation involving another party, as Foxton J recently said in Lakatamia v Tseng [2023] EWHC 3023 (Comm) at [14]:

"It was accepted before me that the findings of liability in the 2021 Judgment do not bind Ms Lakatamia (Hollington v Hewthorn [1943] KB 587). However, that does not mean that the contents of the judgment are without significance. The relevant principles were set out [by] Laurence Rabinowitz KC in JSC BTA Bank v Ablyazov [2016] EWHC 3071 (Comm), [24]...: "The application of the principle in Hollington has in recent years become substantially diluted. In particular:

(l) Whilst a court cannot rely upon a bare finding of a prior court for example that a party has been negligent, it can rely upon the substance of the evidence which is referred to in the judgment of the prior court, including for example the contents of a document, the evidence given by a witness and the like: Rogers v Hotle [2015] QB 265, [40], [55];

(2) Whilst....a subsequent court cannot rely upon [non-binding opinion in an earlier one as it] must make its own findings of fact, a reference in a judgment to the substance of evidence is itself evidence which the judge in a later case can take into account "in like manner as he would any other factual evidence, giving to it such weight as he thinks fit" : Rogers (supra).

(3) Moreover, if the judge in a later case concludes that the matters of primary fact recorded in an earlier judgment justify the conclusions reached in that judgment, he is entitled to reach the same conclusion: Otkritie International v Gersamia [2015] EWHC 821 (Comm), [25] (Eder J)".

In this case, the Purle Judgment is not only an important part of the procedural history (which is why I requested it when I saw it was not in the original bundle). It is itself evidence of the substance of the testimony given by the witnesses to HHJ Purle QC at trial in 2010 (which gives a navigable overview of the key parts of their evidence which the transcripts detail). I can take into account as I see fit; and indeed, I agree with particular conclusions of HHJ Purle QC on matters of primary fact in his judgment (e.g. the Properties were derelict). However, there also seems to me another forensic aspect that is of particular relevance on a retrial after setting aside for fraud (which Lakatamia and Ablyazov were not). That is the forensic significance of HHJ Purle QC 'highlighting' points the parties can be expected to be prepared to address before me. I will give examples both ways:

54.1 Firstly, in favour of the Defendants, at [14], HHJ Purle QC rejected the evidence of the Claimant and her son Bobby Takhar that they did not want the Properties to be sold. That point is entirely unaffected by the Krishans' fraud, as it relates to a document having nothing to do with them and before they were even involved. I will consider that point below.

54.2 Secondly, in favour of the Claimant, there is HHJ Purle QC's criticism at [29] of his judgment of the Defendants' 'Balber Takhar Account' and 'Options for Gracefield' documents discussed below, which he described as clearly and deliberately misstating the position, in an endeavour to put pressure on Mrs Takhar' and 'unworthy and wholly inappropriate steps to take'. Again, I will have to reach my own conclusion on those documents below, but the fact that HHJ Purle QC disapproved of them, even when dismissing the Claimant's claim, puts at least a little wind in her sails in inviting me to make a similar or even stronger finding about them. On that subject, also relevant are Mr Gasztowicz QC's comments about those documents, which I now consider in the context of the second question.

Are the parties 'back to square one' ? The status of the Gasztowicz Judgment

55. This second question raises a quite different point: what (unappealed) findings made by the court when setting a judgment aside then bind the judge at re-trial ? (Obviously if the judgment is not set aside, this does not arise). Again, there is little direct authority on this point, to the extent that even in the excellent 'Civil Fraud' (1^st Ed, 1^st Supp, 2022) by Thomas Grant KC and David Mumford KC, the learned editors can only offer fairly general guidance on the retrial at 38-032:

"The court would also have to consider what consequential directions would be required for the hearing of the trial, and in particular, what directions are appropriate as regards the 'fraudulent' evidence. The deceiving party will, presumably, have to adduce a further witness statement to allow the new trial to proceed on honest evidence. Given that the procedure for setting aside the original judgment will have taken place in open court, it is inevitable that the tribunal on the new trial will be aware of the fraud perpetrated in respect of the original judgment, notwithstanding any prejudicial effect that may have."

Whilst no authorities are cited, I respectfully agree with this helpful summary. However, I would wish to build on it in Res Judicata terms as well. As explained by the Supreme Court in Takhar and cases cited in it such as Jonesco, the fresh action to set aside a judgment for fraud is a different cause of action than the original substantive claims. As Lord Sumption explained in Takhar at [61], cause of action estoppel cannot bite on the original judgment to defeat a set-aside action. However, the corollary is that the finding of fraud does not in itself create a cause of action estoppel in respect of any of the original or new causes of action (even deceit, at least where, as here, the allegation of deceit does not relate to the proven fraud). But insofar as the finding of fraud is relied on as part of any of the pleaded causes of action (here, conspiracy), then an issue estoppel can arise. In Lord Sumption's terms in Virgin at [17] and [22] quoted above, it arises if the issue of fraud has been determined and is 'necessarily common' to both the set-aside action and the conspiracy claim, unless there are no 'special circumstances'.

56. Indeed, to illustrate how issue estoppel works, before turning to the status of Gasztowicz Judgment, whilst I did not hear argument on it, there seems to me a clear issue estoppel in relation to the Supreme Court decision in Takhar itself. That is the question of when the Claimant 'could with reasonable diligence have discovered the fraud' for the purposes of s.32 Limitation Act 1980 quoted at the start of this judgment and considered later. It is clear from Finzi it was part of the ratio of the Supreme Court's decision in Takhar that the Claimant could have discovered the fraud with reasonable diligence before the Purle Judgment. That is not only clear from the Court's judgments, the contrary conclusion would render their whole decision obiter ! In fairness, there is no dispute about that and I need not articulate it as an issue estoppel (although technically I consider it gives rise to one). One issue on limitation for conspiracy is really when before the Purle Judgment the fraud took place and then when was it 'discoverable with reasonable dilligence'. Both were obviously before the Purle Judgment - but how long before ? That illustrates that an issue estoppel does not necessarily determine the outcome of the question where one 'issue' is 'estopped' by a prior decision. In this case, that raises both the scope and effect of any issue estoppel in litigation.

57. As to the scope of an issue estoppel, it is important to be precise about what was actually decided in the particular set-aside judgment. Not everything said in it is a formal decision (rather than observation). This point can be illustrated with two different aspects of the Gasztowicz Judgment. Firstly, Mr Gasztowicz QC made similar observations as had Judge Purle QC on the deliberate falsehoods in the Balber Takhar Account and Options for Gracefield documents. It is worth setting out what he said on that topic in full, as I will return to it later in this judgment:

"113. As shown both in this trial and in the trial before Judge Purle, what has been called the "Balber Takhar Account" put forward by the Defendants to the Claimant during the course of their dealings contained deliberate untruths. It was demonstrably untrue in referring to the Second and Third Defendants having spent £556,000 from their own accounts management, professional fees, planning applications and surveys, etc. This document was prepared and presented to the Claimant by the Defendants with these false figures in it in order, as the Second Defendant described it to Judge Purle, to "get her off the fence and do something with these properties"...

116. Similarly, in order to try to persuade the Claimant to agree to sell the properties, the Defendants presented her with the "Options for Gracefield" document to try to achieve what they wanted. This also contained demonstrable untruths - for example in stating that a £60,000 corporation tax bill that would shortly need to be paid....

119. These documents were created by the Defendants in an attempt to persuade the Claimant to act on the basis of the untruths in them. That is by no means the same, and is very far from, producing a forged document to a court to try to pervert the course of justice."

However, that last point shows Mr Gasztowicz QC clearly differentiating between (i) falsehoods in documents intended only for the other party; and (ii) forged documents tendered to the Court. The former went to the Krishans' credibility on the latter - the only question being decided - whether the Purle Judgment was procured by fraud on the Highland test. These observations were staging-posts on the way to that decision, not part of it such as to found issue estoppel. Nevertheless, these observations also 'highlight' this evidence (just as Judge Purle QC's observations do so). Indeed, Mr Halkerston invited me to reach the same conclusion for the same reasons even if those were not 'binding'. I will certainly take them into account, but I must reach my own conclusions.

58. Turning to what Mr Gasztowicz QC actually decided and so what does fall within the true 'scope' of the issue estoppel, as described when summarising his judgment in the procedural history, the three findings Mr Gasztowicz QC made were as follows. Firstly, at [74] he found the bank account forms in 2006 and 2011 had not been forged. Mr Halkerston accepts that finding now binds the Claimant and so her argument about that is not pursued before me and I will only touch on it in my findings of fact. Secondly, Mr Gasztowicz QC in his judgment at [64]-[65] following the handwriting experts' joint view that the Claimant's signature on the copy PSA had been forged, noted that was no longer disputed. Therefore, that is a binding decision too. Thirdly and most importantly, the Gasztowicz Judgment rejected the Krishans' argument that SB or her firm had forged the PSA signature, concluding at [126]-[127] it was the Krishans together:

"I am satisfied, on the balance of probabilities, that not only did the Defendants have strong motive, and opportunity, to forge the document by transposition of the Claimant's signature onto it from elsewhere (and that there is no evidence or sufficient reason to think that anyone at [SB's firm] did so), but that they did do so. Based on all the evidence I have heard, the Defendants were in my judgment, on the balance of probabilities, responsible for the forgery of the signed profit-sharing agreement document by adding the Claimant's signature to a copy of it by transposition from the ...letter. This amounted, in the words of Aikens LJ in RBS, to "conscious and deliberate dishonesty"." (my underline)

Mr Gasztowicz QC went on to find that this forgery was 'material' to the Purle Judgment stating at [137] (as quoted more fully above):

"Had the Judge known that [the Claimant's] signature on the copy..before him had been forged, for which the Defendants were responsible (causing him also to weigh their oral evidence in the light of that knowledge), that plainly would have (in the words of Aikens LJ in RBS) "entirely changed the way in which the first court approached and came to its decision"..."

59. Whilst the Krishans repeatedly asserted in evidence that Mr Gasztowicz QC 'only' decided they had forged the PSA 'on the balance of probability', that finding binds them. As confirmed in Re B (Children) [2009] AC 11 (HL), there is only one civil standard of proof - the balance of probabilities - and just because something is very serious (indeed a crime) that does not elevate that standard of proof into a criminal standard of proof, but is relevant to the inherent probabilities (as I discuss in a moment). As Lord Hoffmann pithily explained at [2]:

"If a legal rule requires a fact to be proved (a 'fact in issue'), a judge or jury must decide whether or not it happened. There is no room for a finding that it might have happened. The law operates a binary system in which the only values are zero and one. The fact either happened or it did not....If the tribunal is left in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof. If the party who bears the burden of proof fails to discharge it, a value of zero is returned and the fact is treated as not having happened. If he does discharge it, a value of one is returned and the fact is treated as having happened."

Here, 'a value of one was returned' on the Krishans together ('the Defendants' as I underlined) forging the Claimant's signature on the copy PSA before Judge Purle QC. So they are treated as having done so. If they disagreed with that finding, they should have appealed it. They did not do so. Now, the findings in the Gasztowicz Judgment both that (i) the Krishans together forged the Claimant's signature on the copy PSA; and (ii) this forgery 'entirely changed the way in which HHJ Purle QC came to his decision' (i.e. it was an operative cause of the Purle Judgment) are (as Lord Sumption put it in Virgin at [17] and [22]) 'necessarily common' to the Gasztowicz Judgment and the Claimant's conspiracy claim, indeed they are central to both. Moreover, no 'special circumstances' of the kind described in Arnold and Virgin are suggested, doubtless as there are not any in this case. Therefore, in my view, issue estoppel arises in respect of both of those findings, which was not really disputed in law by Mr Perring, even though Mr Graham preferred to call them 'juridical facts'.

60. Even if I am wrong and the Krishans' forgery of the Claimant's signature on the copy PSA and its causative impact on the Purle Judgment are simply 'juridical facts', those findings still bind the Krishans. Indeed, that was perfectly clear from Mr Graham and Mr Perring's pre-trial Skeleton Argument. Therefore, I was not expecting to hear much in evidence about the forgery itself, as it was already proven. However, as I shall explain below, following disclosure in 2022 by the Krishans' then-solicitors of emails from the Krishans in October-November 2008 not previously disclosed in the litigation, the Krishans have put forward a new factual case about the forgery they did not run before Mr Gasztowicz QC in 2020 (when they blamed their accountant, whom I am calling SB). Before me, the Krishans suggested those emails show that in October 2008, they had found a copy of the PSA they believed had been signed by the Claimant and sent it to SB (along with a second copy of the PSA they signed as SB had lost the first copy they had signed themselves in 2006). The Krishans accepted the copy PSA SB had later sent their solicitors and which was disclosed in the Original Proceedings was forged - which they still denied they had done - but believed the copy PSA they sent to SB in 2008 had been genuinely signed by the Claimant. My initial view was this argument was foreclosed by issue estoppel as it could and should have been presented to Mr Gasztowicz QC: see Lord Sumption's judgment in Virgin at [22]. However, Mr Halkerston did not take this point when I raised it, preferring to cross-examine the Krishans about it. Therefore, given its importance to the conspiracy claim, I will have to make detailed findings of fact about this issue, to an extent covering again the same ground as the Gasztowicz Judgment which I quote at length, albeit with new documents and evidence. I am afraid this will add significantly to the length of my own judgment. Indeed, it is also relevant to the Krishans' credibility, as I will discuss in my assessment of the evidence. However, before turning to that, I will first discuss fact-finding after fraud.

Principles of Fact-Finding After Fraud Findings

61. As explained in the Introduction, fact-finding in a re-trial after a judgment has been set aside for fraud may be very complex. There is a 'perfect storm' of challenges. Firstly, given the inevitable delay built-in by the initial litigation, its re-opening and the re-hearing of the original claims (and any new ones), many years may have passed since the events under dispute. (Here, trial was over 18 years after the Claimant and Krishans began their discussions in mid-2005). Moreover, witness' memories of what happened may have been distorted by the almost constant litigation and the finding of fraud. Indeed, some potential witnesses may no longer be able to give evidence or even have passed away. Secondly, after such a delay and inevitable impact on witness memory, a judge's instinct may be to rely heavily on contemporary documents. However, where there has been a forgery to procure a judgment by fraud as here, it may strike at the heart of the reliability of such documents. Thirdly, faced with such unreliable memory and wary of how much weight to place on certain key documents, a judge risks being buried under the morass of material available. Moreover, as is clear from the quote from Civil Fraud above, there seems to be no authority and little guidance on how to approach fact-finding at the re-trial. So, I hope I may be forgiven for considering the best approach in principle in some detail first. I will start by reviewing recent judicial observations on memory, then consider the role of contemporary documents and finally I will propose a 'holistic approach'.

The Persistence of Memory (Problems)

62. In my own experience, the single most-quoted authority in any skeleton argument across a range of fields of law is Leggatt J's (as he then was) analysis of the fallibility of memory in Gestmin v Credit Suisse [2013] EWHC 3560 at [16]-[22]. Sure enough, each Counsel here referred me to it. Despite its familiarity, because of its importance, I shall set it out once again in full:

"16. While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people's memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose: (1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and (2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate.

17. Underlying both these errors is a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is true even of so-called 'flashbulb' memories, that is memories of experiencing or learning of a particularly shocking or traumatic event. (The very description 'flashbulb' memory is in fact misleading, reflecting as it does the misconception that memory operates like a camera or other device that makes a fixed record of an experience.) External information can intrude into a witness' memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection. Events can come to be recalled as memories which did not happen at all or which happened to someone else (referred to in the literature as a failure of source memory).

18. Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time.

19. The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party's lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.

20. Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. A witness is asked to make a statement, often......when a long time has already elapsed since the relevant events. The statement is usually drafted for the witness by a lawyer who is inevitably conscious of the significance for the issues in the case of what the witness does nor does not say. The statement is made after the witness's memory has been 'refreshed' by reading documents. The documents considered often include statements of case and other argumentative material as well as documents which the witness did not see at the time or which came into existence after the events which he or she is being asked to recall. The statement may go through several iterations before it is finalised. Then, usually months later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court. The effect of this process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be true or false, and to cause the witness's memory of events to be based increasingly on this material and later interpretations of it rather than on the original experience of the events.

21. It is not uncommon (and the present case was no exception) for witnesses to be asked in cross-examination if they understand the difference between recollection and reconstruction or whether their evidence is a genuine recollection or a reconstruction of events. Such questions are misguided in at least two ways. First, they erroneously presuppose that there is a clear distinction between recollection and reconstruction, when all remembering of distant events involves reconstructive processes. Second, such questions disregard the fact that such processes are largely unconscious and that the strength, vividness and apparent authenticity of memories is not a reliable measure of their truth.

22. In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose - though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth."

63. Gestmin itself was a negligence claim by an investment company (the alter ego of a wealthy investor) against a bank which gave the company advice to invest in sub-prime mortgages prior to the 'credit crunch' starting in 2007/08. Leggatt J found unreliable the recollection of the investor that his company had specified low-risk investments, because it was not only unsupported by contemporary documents, the bank's investment instruction documents flatly contradicted it.

64. Yet that particular feature of plentiful documentation in Gestmin is sometimes overlooked when it has been cited in a wide range of fields. It has particularly proliferated in personal injury and clinical negligence case. I reviewed key cases in that field in Freeman v Pennine NHST [2021] EWHC 3378 (QB), they were summarised by HHJ Bird in Jackman v Harold Firth [2021] EWHC 1461 (QB) and again in Powell v University Hospital Sussex NHST [2023] EWHC 736 (KB) by Mr Dias KC. Gestmin has even been cited in family cases, although that was questioned by Jackson LJ in Re B-M [2021] EWCA Civ 1371 cited in Powell.

65. Nevertheless, even within its original setting of commercial cases, it is necessary to put Gestmin in some judicial and scientific context - both before and since. The science of forensic memory has developed in the decade since Gestmin, in fairness, not least because of the debate it provoked. However, as the Court of Appeal emphasised in Martin v Kogan [2020] EMLR 4 at [88]:

"Gestmin is not to be taken as laying down any general principle for the assessment of evidence. It is one of a line of distinguished judicial observations that emphasise the fallibility of human memory and the need to assess witness evidence in its proper place alongside contemporaneous documentary evidence and evidence upon which undoubted or probable reliance can be placed. Earlier statements of this kind are discussed by Lord Bingham in his well-known essay 'The Judge as Juror: The Judicial Determination of Factual Issues' (from 'The Business of Judging', Oxford 2000). But a proper awareness of the fallibility of memory does not relieve judges of the task of making findings of fact based upon all of the evidence. Heuristics or mental short cuts are no substitute for this essential judicial function. In particular, where a party's sworn evidence is disbelieved, the court must say why...it cannot simply ignore the evidence."

66. Indeed, that 'line' of judicial observations on memory goes back at least 45 years before Gestmin. One quoted by Lord Bingham in that essay was Lord Pearce's dissent in Onassis v Vergottis [1968] 2 Lloyds Rep 403 (HL) at pg. 431:

"'Credibility' involves wider problems than mere 'demeanour' which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person ? Secondly, is he, though a truthful person telling something less than the truth on this issue, or though an untruthful person, telling the truth on this issue ? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so has his memory correctly retained them ? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by over much discussion of it with others ? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason, a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken ? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability..."

67. Indeed, Bingham J's (as he then was) luminous essay 'The Judge as Juror', cited in Martin, itself anticipates much of Leggatt J's analysis in Gestmin by almost 30 years. Bingham J discussed the fallibility of memory and quoted psychological research showing memory did not just fade in a linear manner as Lord Pearce had assumed in Onassis, but dropped off sharply then plateaued. He discussed how research also showed that memory could be distorted by external influences, including the process of litigation. In my view, [16]-[21] of Gestmin (I return to the more contentious [22]) are best seen as an invaluable updating of Lord Bingham's insights with more modern research, albeit Leggatt J did not cite any.

68. However, Leggatt J himself remedied that in another judgment (rather overlooked by comparison to Gestmin): Blue v Ashley [2017] EWHC 1928 (Comm), which involved a totally undocumented alleged promise of a bonus during an evening's drinking in a pub. Tellingly, despite being a 'commercial case', Leggatt J could not focus on key contemporary documents in the way he suggested at [22] of Gestmin, as there were not any. Instead, he focused intensely on witness evidence of the evening and its plausibility compared with detailed background findings of fact before and after, making allowances for fallibility of memory. He said at [68]:

"....My observations [in Gestmin] have also been specifically endorsed by two academic psychologists in a published paper: see Howe and Knott, "The fallibility of memory in judicial processes: Lessons from the past and their modern consequences" (2015) Memory, 23, 633 at 651-3. In the introduction to that paper the authors also summarised succinctly the scientific reasons why memory does not provide a veridical representation of events as experienced. They explained: "... what gets encoded into memory is determined by what a person attends to, what they already have stored in memory, their expectations, needs and emotional state. This information is subsequently integrated (consolidated) with other information that has already been stored in a person's long- term, autobiographical memory. What gets retrieved later from that memory is determined by that same multitude of factors that contributed to encoding as well as what drives the recollection of the event. Specifically, what gets retold about an experience depends on whom one is talking to and what the purpose is of remembering that particular event (e.g., a friend...a therapist...the police...). Moreover, what gets remembered is reconstructed from the remnants of what was originally stored; that is, what we remember is constructed from whatever remains in memory following any forgetting or interference from new experiences that may have occurred across the interval between storing and retrieving a particular experience. Because the contents of our memories for experiences involve the active manipulation (during encoding), integration with pre-existing information (during consolidation), and reconstruction (during retrieval) of that information, memory is, by definition, fallible at best and unreliable at worst.'......." (this underlining is my own, not Leggatt J's)

69. That three-stage analysis of memory as being 'encoded', 'stored' then 'retrieved' is now mainstream psychological opinion, as is differentiation into three types of memory: 'working memory' (short-term memory), 'semantic memory' (retained knowledge of the world) and 'episodic long-term memory' (memory of experienced events), explained in 2023 British Academy paper 'Legal Aspects of Memory' (https://www.thebritishacademy.ac.uk/documents/4750/JBA-11-p095-Baddeley-et-al.pdf). Its implications for civil litigation were very recently discussed by Popplewell LJ in his invaluable lecture 'Judging Truth from Memory: The Science' (https://www.judiciary.uk/speech-by-lord-justice-popplewell-judging-truth-from-memory). Most importantly, as HHJ Bird noted in Jackman, a similar analysis is now accepted in CPR PD 57AC Appendix p.1.3:

"Witnesses of fact and those assisting them to provide a trial witness statement should understand that when assessing witness evidence the approach of the court is that human memory: (1) is not a simple mental record of a witnessed event that is fixed at the time of the experience and fades over time, but (2) is a fluid and malleable state of perception concerning an individual's past experiences, and therefore (3) is vulnerable to being altered by a range of influences, such that the individual may or may not be conscious of the alteration."

70. Whilst acutely conscious that I am not a psychologist and have no expert evidence in that field in this case, armed with those invaluable observations, I would tentatively suggest all three stages of memory pose risks to accuracy of witness memory, especially in a retrial after a judgment has been set aside for fraud:

70.1 'Encoding'. The risks of memory distortion on encoding are the same with any trial - retrial or not. However, since retrials happen later, there seems a greater premium on contemporary documents. Yet as Popplewell LJ said in his lecture at paras.33-39 and 43-54, even such contemporary encoding of memory itself can be distorted by semantic memory and our beliefs, 'confirmation bias' and lack of attention. Moreover, he said at para.55:

"[Y]ou perhaps begin to understand why I expressed a little pushback on courts giving such primacy to contemporaneous documents. They may be produced near the time, but..[are]...after the memory has been encoded, and if there is an encoding fallibility, which there may be for these different reasons, it infects the so-called contemporaneous record every bit as much as other reasons for the fallibility of recollection which affect it at the storage and retrieval stage."

70.2 'Storage': As Popplewell LJ stressed at ps.56-63 of his lecture, the main problem with storage of memories of events in long-term episodic memory is forgetting. A retrial after fraud by definition comes with substantial delay meaning witnesses forget things. Yet as Lord Bingham recognised decades ago, forgetting is not as linear as Lord Pearce described in Onassis: 'with every day that passes the memory becomes fainter'. Research actually suggests memory loss is initially rapid and levels off over time. But it also again suggests what we 'store' depends on what matters to us, perspectives and wishful thinking. By reference to Leggatt J's observation in Gestmin at [19]-[20], I would add if there is a dispute, those factors may be entrenched by the litigation and so storage may be distorted by a 'litigation mindset'.

70.3 'Retrieval' – As Leggatt J said in Gestmin, that same litigation mindset also affects how all witnesses retrieve memories in preparing their statements and then giving evidence. As Popplewell LJ said at para.40 of his lecture:

"The semantic memory can also corrupt a recollection by affecting it at the retrieval stage....That applies to some extent to recall of events, where...semantic memory can do some filling in of the gaps where details are forgotten. It is especially important to keep in mind when witnesses are giving evidence of what they thought or believed at the time....As Leggatt J said in Gestmin 'Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs'."

Moreover, in a retrial after fraud, memories are being 're-retrieved' having been retrieved repeatedly earlier in the litigation - before and at the first trial, the set-aside trial and then the re-trial. With each 're-retrieval' a witness' 'story' risks being based to an increasing extent on their previous statements and transcripts of evidence at earlier trials, rather than what they actually can remember - or 'retrieve' - of the events under dispute - what Popplewell LJ in his lecture at para.84 called 'a single-handed Chinese Whispers'. Indeed, the finding of fraud itself may well distort memories, reinforcing wider suspicion or even paranoia in the 'innocent party' and overshadowing how the 'guilty party' then presents their later evidence.

Of course, such issues with memory generally are why the preparation of witness statements needs to be done with such care (Popplewell LJ at p.88 of his lecture pointed out oral evidence in chief used to be normal and still is in criminal cases). As Lady Rose in her recent lecture 'The Art and Science of Judicial Fact-Finding' (https://www.supremecourt.uk/docs/speech-230714.pdf) explains, this is one reason why the changes to witness statements in the Business and Property Courts in PD57AC were made to ensure witnesses stuck to their personal knowledge, rather than simply comment on contemporary documents, to which I now turn.

The Strengths and Weaknesses of Contemporary Documents

71. Whilst Leggatt J's observations about memory itself in Gestmin at paragraphs [16]-[21] have been widely endorsed, his proposed solution to the problem at [22] has provoked more debate. For convenience, I repeat it (with my underlining):

"In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose - though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth."

72. Just as Leggatt J's observations at [16]-[21] form part of a line of judicial thinking on memory (c.f. Martin at [88]), so too does his focus of documents at [22]. This 'line' was helpfully summarised by Lord Kerr (albeit in his dissenting judgment) in Bancoult v SSFCO (No.3) [2018] 1 WLR 973 (SC). The case concerned the long-running litigation over the British Indian Ocean Territory in the Chagos Islands. In 2010, the British government declared a Marine Protection Area ('MPA'), but Wikileaks released a US Embassy cable of a meeting between US and UK diplomats in London which the claimants argued proved the real purpose of the UK government declaring the MPA was simply another way to stop locals returning. In the Administrative Court, because the cable was unlawfully leaked, the Judge ruled the British diplomats giving evidence could not be cross-examined on it further and held that there was no improper purpose. The Court of Appeal and majority of the Supreme Court held the cable was admissible despite the unlawful leak once it came into the public domain, but held that further cross-examination of the British diplomats on it would have made no difference. Lord Kerr disagreed with the latter point and said this on contemporary documents:

"100 Case law emphasises the importance of documentary evidence in assessing the credibility of oral witnesses. In Onassis...at 431, Lord Pearce, having reviewed the various reasons that a witness' oral testimony might not be credible, stated, "All these problems compendiously are entailed when a judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part." In Armagas Ltd v Mundogas SA ('The Ocean Frost') [1985] 1 Lloyd's Rep 1, 57 Robert Goff LJ made this observation: "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'.

101 That approach was approved by the Privy Council in Grace Shipping Inc v C F Sharp & Co (Malaya) Pte Ltd [1987] 1 Lloyd's Rep 207 and applied in a number of subsequent cases. For example, in Goodman v Faber Prest Steel [2013] EWCA Civ 153 the Court of Appeal held that the trial judge had erred in accepting a personal injury claimant's evidence of pain without dealing with contradictory documentary evidence and explaining why the claimant's evidence was to be preferred. Moore-Bick LJ applied the approach of Robert Goff LJ and stated that 'memory often plays tricks and even a confident witness who honestly believes in the accuracy of his recollection may be mistaken. That is why in such cases the court looks to other evidence to see to what extent it supports or undermines what the witness says and for that purpose contemporary documents often provide a valuable guide to the truth.".....

103 Although said in relation to commercial litigation, I consider that the observations of Leggatt J in Gestmin....at [15]—[22] have much to commend them. His statement at para 22 appears to me especially apt..."

73. To those endorsements of the value of contemporary documents can now also be added those of Males LJ in Simetra v Ikon [2019] 4 WLR 112 at [48]-[49]:

"In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party's internal documents including e-mails and instant messaging. Those tend to be the documents where a witness's guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgments in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents. Although this cannot be regarded as a rule of law, those documents are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanour while giving evidence. The classic statement of Robert Goff LJ in Armagas...is frequently, indeed routinely, cited...It is therefore particularly important that, in a case where there are contemporary documents which appear on their face to provide cogent evidence contrary to the conclusion which the judge proposes to reach, he should explain why they are not to be taken at face value or are outweighed by other compelling considerations...."

74. Indeed, such is the importance of contemporary documents, especially in commercial cases, that as Lady Rose again explains in her lecture, the BPC disclosure process has been overhauled in CPR PD 57AD, so that there is greater oversight from the Court and that disclosure is focussed on the key issues of the case, by reference to the different 'disclosure models'. That will be important in a re-trial after a judgment is set aside for fraud, because of the sheer volume of documents (both contemporaneous with events under dispute and relating to the later litigation). Otherwise, the parties may lose sight of the wood for the trees.

75. Nevertheless, however important contemporary documents may be to the forensic process, they may not be a panacea. Just as Leggatt J himself found in Blue with the absence of contemporary documents concerning the crucial conversation about the bonus, it may not always be possible, even in commercial cases, to follow his suggestion in Gestmin at [22] to 'place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts'. This point was also emphasised in Martin at [89]:

"[T]he observations in Gestmin were expressly addressed to commercial cases. For a paradigm example of such a case, in which a careful examination of the abundant documentation ought to have been at the heart of an inquiry into commercial fraud, see Simetra...and the apposite remarks of Males LJ at paras. 48-49. Here, by contrast, the two parties were private individuals living together for much of the relevant time. That fact made it inherently improbable that details of all their interactions over the creation of the screenplay would be fully recorded in documents...."

I suggest there may be three individual and cumulative challenges in a case where the court is not as 'blessed' with plentiful reliable documents as it was in Gestmin or Simetra: the potential paucity, ambivalence and deceptiveness of documents.

76. Firstly, as in Blue and indeed Martin itself - about contested authorship of a film - there may be a paucity of such documents because conversations are not recorded. As will appear, that is a particular issue in this case too with the many conversations prior to transfer between the Claimant and the Krishans. This point was developed further in Natwest v Bilta [2021] EWCA Civ 680, a claim about alleged dishonest assistance from bank employees in a VAT carousel fraud. As the Court (Asplin LJ, Andrews LJ and Birss LJ) explained at [49]-[50]:

"In a case such as the present, where the events in question took place over 9 years before trial and occurred in a narrow period of around 3 weeks, the salutary warnings about the recollections of witnesses in Gestmin and Blue are pertinent. It was therefore of paramount importance for the Judge to test that evidence against the contemporaneous documents and known or probable facts if and to the extent that it was possible to do so. We say, 'if and to the extent that it was possible to do so', because it is important to bear in mind that there may be situations in which the approach advocated in Gestmin [at [22]] will not be open to a judge, or, even if it is, will be of limited assistance. There may simply be no - or no relevant - contemporaneous documents, and even if there are, the documents themselves may be ambivalent or otherwise insufficiently helpful. The case could be one about an oral promise which turns entirely on the word of one person against another's, and the uncontested facts may well not point towards A's version of events being any more plausible than B's. Even in a case which is fairly document-heavy (as this one was) there may be critical events or conversations which are completely undocumented...."

77. Secondly, as the Court in Natwest mentioned, such contemporary documents as there are, may be 'ambivalent or otherwise insufficiently helpful'. For example, in Bancoult, whilst Lord Kerr in dissent considered the leaked cable confirmed the real purpose of the MPA was to stop locals returning to the islands, the majority of the Supreme Court interpreted it as essentially ambivalent. As Lord Mance said at [40]-[41], as the US not UK Diplomats had prepared the note, it was more likely to record what the US was interested in and therefore was ambivalent in proving the UK diplomats' purpose in establishing the MPA. Moreover, as Popplewell LJ said in his lecture at para.55, 'contemporaneous documents...may be produced near the time, but...if there is an encoding fallibility... it infects the so-called contemporaneous record every bit as much'.

78. Thirdly, even worse, a document may simply be deceptive at face value, deliberately misleading, or even forged. As my former colleague in Birmingham BPC, HHJ Cooke, said in Singh v Singh [2016] EWHC 1432 (Ch) at [12]:

"Such documentation as there is tends to favour the defendant, but that cannot be conclusive where the nature of the documents is said to be to assist in presentation of a false picture to the outside world and not to reflect the arrangements privately agreed."

That is a particular issue here, where the Krishans forged the Claimant's signature on the PSA. However, the accuracy of other documents they produced is also in issue, including the 'Balber Takhar Account' and 'Options for Gracefield' documents. Moreover, the Claimant contends many of the letters apparently in her name were in fact drafted by the Krishans which she signed.

A Holistic Approach

79. Given all these potential problems with witness memory and with the documents, fact-finding seems like a particularly difficult challenge in this case. Certainly, it cannot possibly be as straightforward as simply following the approach in Gestmin at [22] to 'place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts'. However, in my view, that is just one judicial approach to fact-finding which works best in a commercial case with plentiful and reliable documentation like Gestmin itself and Simetra. Yet as Leggatt J's own very different approach in Blue shows, it is far from the only approach, even in 'commercial cases'. Gestmin and Blue are at different ends of the spectrum on the availability and reliability of documents. Most cases are more likely to fall somewhere in between. In truth, all judicial fact-finding involves a mixture of the tools and techniques discussed in cases like Onassis and Armagas: reference to the objective facts and documents, to the witnesses' motives and recollections, and to the overall probabilities, the precise balance of which will depend on the circumstances of the particular case. In some, more like Gestmin, contemporary documents will be central, if not paramount. In others, more like Blue, witness recollection will be central, but must be weighed alongside those other tools and yardsticks as Leggatt J himself did in Blue itself. As the Court of Appeal added in Natwest at [51]:

"Faced with documentary lacunae...the judge has little choice but to fall back on considerations such as the overall plausibility of the evidence; the consistency or inconsistency of the behaviour of the witness and other individuals with the witness's version of events; supporting or adverse inferences to be drawn from other documents; and the judge's assessment of the witness's credibility, including his or her impression of how they performed in the witness box, especially when their version of events was challenged in cross-examination. Provided that the judge is alive to the dangers of honest but mistaken reconstruction of events, and factors in the passage of time when making his or her assessment of a witness by reference to those matters, in a case of that nature it will rarely be appropriate for an appellate court to second-guess that..."

This suggests a 'holistic approach' in terms of the use of those various judicial tools and yardsticks for fact-finding. That sort of approach was applied by Joanna Smith J in Bahia v Sidhu [2022] EWHC 875 (Ch), in a case about events years before with few documents. Likewise, the findings of fact themselves must be determined holistically and not in a 'compartmentalised' way, as Vos C (as he then was) said in St Petersburg Bank v Arkangelsky [2020] 4 WLR 55 at [59]:

"(T)he judge seems rather to have compartmentalised his treatment of the appellants' 16 points..... Put another way, what is lacking in the judgment is an element of standing back and considering the effects and implications of the facts he had found taken in the round. Let me say at once that this approach would not necessarily be fatal to the findings he has made. It would, in my judgment, depend on whether it could properly be said that the somewhat piecemeal approach that he adopted unfairly affected the judge's evaluation of the facts...."

80. A 'holistic approach' also benefits from being open to fact-finding insights from other jurisdictions, including Family and Crime. That was the approach Mr Dias KC adopted in the clinical negligence case of Powell at [25] with his '13 axioms of fact-finding' (which I repeat with some citations and quotations excised):

"(1) The burden of proof rests exclusively on the person making the claim (she or he who asserts must prove), who must prove the claim to the conventional civil standard of a balance of probabilities;

(2) Findings of fact must be based on evidence, including inferences that can properly (fairly and safely) be drawn from the evidence, but not mere speculation (Re A (A child) (Fact Finding Hearing: Speculation) [2011] EWCA Civ 12, per Munby LJ);

(3) The court must survey the "wide canvas" of the evidence (Re U, Re B (Serious injuries: Standard of Proof) [2004] EWCA Civ 567 at [26] per Dame Elizabeth Butler-Sloss P (as then was)); the factual determination "must be based on all available materials" (A County Council v A Mother and others [2005] EWHC Fam 31 at [44], per Ryder J (as then was));

(4) Evidence must not be evaluated "in separate compartments" (Re T [2004] EWCA Civ 558 at [33], per Dame Elizabeth Butler-Sloss P), but must "consider each piece of evidence in the context of all them other evidence" (Devon County Council v EB & Ors. [2013] EWHC Fam 968 at [57], per Baker J (as then was)); such "context" includes an assessment of (a) inherent coherence, (b) internal consistency, (c) historical consistency, (d) external consistency/validity - testing it against "known and probable facts" (Natwest), since it is prudent "to test [witnesses'] veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case" (The Ocean Frost)...

(5) The process must be iterative, considering all the evidence recursively before reaching any final conclusion, but the court must start somewhere (Re A (A Child) [2022] EWCA Civ 1652 at [34], per Peter Jackson LJ...

(6) The court must decide whether the fact to be proved happened or not. Fence-sitting is not permitted (Re B... at [32], per Lady Hale);

(7) The law invokes a binary system of truth (Re B at [2], Lord Hoffmann):

(8) There are important and recognised limits on the reliability of human memory....(Gestmin...); and the court should be wary of "story-creep", as memory fades and accounts are repeated over steadily elapsing time (Lancashire County Council v C, M and F (Children - Fact-finding) [2014] EWFC 3 at [9], per Peter Jackson J);

(9) The court "takes account of any inherent probability or improbability of an event having occurred as part of the natural process of reasoning" (Re BR [2015] EWFC 41 at [7], per Peter Jackson J); "Common sense, not law, requires... regard should be had, to whatever extent appropriate, to inherent probabilities" (In re B at [15], per Lord Hoffmann); (10) Contemporary documents are "always of the utmost importance" (Onassis...per Lord Pearce), but in their absence, greater weight will be placed on inherent probability or improbability of witness's accounts... (Natwest at [50])...

(11) The judge can use findings or provisional findings affecting the credibility of a witness on one issue in respect of another (Arkhangelsky);

(12) However, the court must be vigilant to avoid the fallacy that adverse credibility conclusions/findings on one issue are determinative of another and/or render the witness's evidence worthless. They are simply relevant: "If a court concludes that a witness has lied about a matter, it does not follow that he has lied about everything." (R v Lucas [1981] QB 720, per Lord Lane CJ); Similarly, Charles J: "a conclusion that a person is lying or telling the truth about point A does not mean that he is lying or telling the truth about point B..." (A Local Authority v K, D and L [2005] EWHC 144 at [28]). What is necessary is (a) a self-direction about possible "innocent" reasons/explanations for the lies (if that they be); and (b) a recognition that a witness may lie about some things and yet be truthful "on the essentials ... the underlying realities" (Re A (No.2) [2011] EWCA Civ 12 at [104].

(13) Decisions should not be based 'solely' on demeanour (Re M [2013] EWCA Civ 1147 at [12], per Macur LJ); but demeanour, fairly assessed in context, retains a place in the overall evaluation of credibility: see Re B-M, at [23] and [25]: "a witness's demeanour may offer important information to the court about what sort of a person the witness truly is, and consequently whether an account of past events or future intentions is likely to be reliable"; so long as "due allowance [is] made for the pressures that may arise from the process of giving evidence". But ultimately, demeanour alone is rarely likely to be decisive. Atkin LJ said it almost 100 years ago ('The Palitana') (1924) 20 Ll. L. Rep. 140, 152): "... an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour."

I respectfully agree with all of that, as I do with this summary by Thornton J in Smith v SoS for Transport [2020] EWHC 1954 (QB) at [40] of observations by Stuart-Smith J (as he then was) in Arroyo v Equion [2016] EWHC 1699 (TCC) (chiming with how Juries are routinely directed to fact-find in criminal trials):

"....c. The task of the Court is always to go on looking for a kernel of truth even if a witness is in some respects unreliable.....

d. Exaggeration or even fabrication of parts of a witness' testimony does not exclude the possibility that there is a hard core of acceptable evidence within the body of the testimony....

e. The mere fact that there are inconsistencies or unreliability in parts of a witness' evidence is normal in the Court's experience, which must be taken into account when assessing the evidence as a whole and whether some parts can be accepted as reliable...

f. Wading through a mass of evidence, much of it usually uncorroborated and often coming from witnesses who, for whatever reasons, may be neither reliable nor even truthful, the difficulty of discerning where the truth actually lies, what findings he can properly make, is often one of almost excruciating difficulty yet it is a task which judges are paid to perform to the best of their ability..."

However, I would like to pull all this together and to elaborate on ten points about my own 'holistic approach' to fact-finding - in the particular context of a re-trial after a judgment is set-aside for fraud.

81. Firstly, the burden and standard of proving facts is firmly on the claimant on the balance of probabilities. Where, as here, the defendant has procured a previous judgment through fraud, I must be very careful to avoid reversing or diluting that burden and standard of proof. Whilst the finding of fraud is relevant to the inherent probabilities (as I discuss next), that does not change the burden's incidence or strength. One party's dishonesty does not prove the other's honesty. Whilst the Defendants have put forward a positive case about what happened with the transfer of the Properties, they did not have to do so and do not have to prove it. Moreover, it would also be wrong to choose the 'most likely' scenario unless I am satisfied it is more likely than not - as if I am not so satisfied then it follows the Claimant has failed to discharge her burden of proof, as Lord Brandon said in 'The Popi M' [1985] 1 WLR 948 (HL). There is only one civil standard of proof that does not change with the allegation, as Lord Hoffmann said in Re B at [15]:

"There is only one rule of law, namely that the occurrence of the fact in issue must be proved to have been more probable than not. Common sense, not law, requires that in deciding this question, regard should be had, to whatever extent appropriate, to the inherent probabilities...."

82. Secondly, on such inherent probabilities, I must be conscious of the limits of my understanding of what action is 'inherently probable' for an individual in a different social or cultural situation than myself. As Popplewell LJ said at para.14 of his lecture, quoting from Lord Bingham's essay 'The Judge as Juror':

"Lord Bingham said: 'An English Judge may have a shrewd idea of how a Lloyd's broker, or a Bristol wholesaler or a Norfolk farmer might react in some situation, but he...should feel very much more uncertain about the reaction of a Nigerian merchant or an Indian ship's engineer or a Yugoslav banker'. Speaking for myself I'm not sure I would be confident even about the Lloyds broker, let alone the Bristol wholesaler or Norfolk farmer."

More generally, in JSC Bank v Kekeman [2018] EWHC 791, Bryan J pointed out that fraud and dishonesty are uncommon, so proof requires cogent evidence, as Andrew Smith J said in Fiona Trust v Privalov [2010] EWHC 3199 at [1438]:

"It is well established that 'cogent evidence is required to justify a finding of fraud or other discreditable conduct' per Moore-Bick LJ in Jafari-Fini v Skillglass [2007] EWCA Civ 261 at para.73. This principle reflects the court's conventional perception that it is generally not likely that people will engage in such conduct: "where a claimant seeks to prove a case of dishonesty, its inherent improbability means that, even on the civil burden of proof, the evidence needed to prove it must be all the stronger", per Rix LJ in Markel v Higgins, [2009] EWCA 790 at para 50. The question remains one of the balance of probability, although typically...(as cited by Lord Nicholls in In re H, [1996] AC 563 at p.586H), "The more serious the allegation the more cogent the evidence required to overcome the unlikelihood of what is alleged and thus to prove it". Associated with the seriousness of the allegation is the seriousness of the consequences, or potential consequences, of the proof of the allegation because of the improbability that a person will risk such consequences."

Likewise, very recently in Rea v Rea [2024] EWCA Civ 169 at [32], Newey LJ said that undue influence (at least by coercion) is also inherently improbable. Having said that, where, as here, there has already been a finding of fraud, that is also relevant to the inherent probabilities of other dishonest or fraudulent conduct, as Eder J explained in Otkritie v Urumov [2014] EWHC 191 at [89]. Indeed, in Arkangelsky, in finding the judge wrongly leapt from inherent improbability of fraud into imposing too high a standard of proof, Males LJ observed at [120]:

"Once other findings of dishonesty have been made against a party, or he is shown to have given dishonest evidence, the inherent improbability of his having acted dishonestly in the particular respect alleged may be much diminished and will need to be reassessed."

83. Thirdly, however, the corollary of that last point - that a prior finding of fraud may diminish the inherent improbability of other dishonest conduct - needs to be balanced against the point regularly stressed in criminal and family cases (most famously in R v Lucas [1981] QB 720) that: 'if a court concludes that a witness has lied about a matter, it does not follow that he has lied about everything'. I was referred to a suggested 'Lucas direction' by another Birmingham BPC colleague, HHJ Williams in Singh v Jhutti [2021] EWHC 2272 (Ch) at [62] (another local case about informal property transactions within an extended family):

"I remind myself that witnesses can often lie and for different reasons. Lies in themselves do not necessarily mean that the entirety of the evidence of a witness should be rejected. A witness may lie in a stupid attempt to bolster a case, but the actual case nevertheless remains good irrespective of the lie. A witness may lie because the case is a lie."

To similar effect is Roth J's comment in Slocom v Tatik [2012] EWHC 2464 (Ch) at [23] in respect of a particular witness who gave evidence in that case:

"[S]ome of [the witness'] conduct was not only discreditable but dishonest. However, that does not necessarily mean that all his evidence in this case is to be rejected. The fact that an individual has acted dishonestly does not mean that he is therefore dishonest in all that he says or does."

Likewise, in Martin v Kogan [2021] EWHC 24 (Ch) (the retrial of the action relating to authorship of a film following the Court of Appeal allowing the appeal as quoted above), Meade J took a similar approach at [51]:

"...There was agreement on the principles that: (i) Just because a witness is lying on one issue does not mean that the entirety of their evidence is to be rejected; (ii) It should be borne in mind that a witness may lie to bolster a true story, or to try to bolster a false one; (iii) A witness's evidence may be wholly wrong without his or her having lied—their recollection may be distorted by reinterpretation of what happened, or even delusion."

I remind myself of all those observations and bear them strongly in mind.

84. Fourthly, I remind myself of the distinction between finding 'primary facts' as to what actually happened on the balance of probabilities and drawing inferences on the same standard in the absence of direct evidence on issues such as an individual's state of mind, like their intention or beliefs (and indeed, 'fraud' and 'dishonesty'). This is a distinction well-recognised in appellate authorities, like Lord Hodge's judgment in Beacon v Maharaj [2014] UKPC 21 at [12] and [17], both quoted in Enal v Singh [2023] 2 P&CR 5 (PC)):

"Where a judge draws inferences from his findings of primary fact ...dependent on his assessment of the credibility or reliability of witnesses and of the weight to be attached to their [oral] evidence, an appellate court may have to be similarly cautious in its approach to his findings of such secondary facts and his evaluation of the evidence as a whole...Where findings of fact based entirely or almost entirely on undisputed documents, one will be close to the latter end of the spectrum."

Indeed, as I shall discuss below, in Enal, Sir Nicholas Patten giving the Privy Council's judgment at [37]-[38] moved away from older more restrictive authorities on drawing inferences of a transferor's intention when transferring property to endorse this more modern approach based on all the evidence as articulated in Lavelle v Lavelle [2004] EWCA Civ 223 at [19] by Lord Phillips:

"...[I]t is not satisfactory to apply rigid rules of law to the evidence that is admissible to rebut the presumption of advancement. Plainly, self-serving statements or conduct of a transferor, who may long after the transaction be regretting earlier generosity, carry little or no weight. But words or conduct more proximate to the transaction itself should be given the significance they naturally bear as part of the overall picture."

On that 'overall picture', as there is rarely direct evidence (e.g. admissions) of fraud or dishonesty, inferences of them must be based on all the evidence and primary facts. As noted in Kekhman, Moore-Bick LJ said in Jafari-Fine at [76]:

"Whenever an allegation of fraud or similar misconduct is made it is particularly important to consider the whole of the evidence before reaching a final conclusion, to test the oral evidence by reference to any contemporaneous documents and to consider the inherent probabilities...."

As Bryan J added in Kekeman at [78]-[79], such inferences are often based on 'circumstantial evidence' rather than direct evidence of eyewitnesses etc:

"[78] As is often the case in cases involving allegations of civil fraud and questions of knowledge, much of the evidence in the present case is circumstantial evidence. The nature of circumstantial evidence is that its effect is cumulative, and the essence of a successful case based on circumstantial evidence is that the whole is stronger than individual parts. In relation to circumstantial evidence and the drawing of inferences...... [Rix LJ said in JSC v Ablyazov [2012] EWCA Civ 1411 at [52]]: "....The essence of....successful circumstantial evidence is the whole is stronger than individual parts. It becomes a net from which there is no escape.....[A] jury may quite properly draw the necessary inference having regard to the whole of the evidence, whether or not each individual piece of evidence relied upon is proved beyond reasonable doubt, provided they reach their conclusion upon the criminal standard of proof. Indeed, the probative force of a mass of evidence may be cumulative, making it pointless to consider the degree of probability of each item of evidence separately. '"

[79] Of course, what Rix LJ stated in Ablyazov...was stated in the context of contempt where the standard of proof is to the criminal standard...where the 'net' metaphor is particularly apt. However, care needs to be taken in utilising [that] metaphor where the standard is th[e] balance of probabilities. Something can be proved on balance of probabilities even if all other possibilities have not been excluded, which is why Lord Millett in Three Rivers referred to some fact which tilts the balance and justifies an inference of dishonesty. Nevertheless, the points that are made that it is the essence of a successful circumstantial case that the whole is stronger than the individual parts, and that circumstantial evidence works cumulatively, are equally apt in the context of civil fraud."

That reference is to Three Rivers DC v Bank of England [2003] 2 AC 1 (HL) (quoted by Bryan J in Kekhman at [42]), where Lord Millett said at [186]:

"It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved."

However, in Arkhangelsky at [42] Vos C clarified Lord Millett's observation:

"[When he] said that it was not open to the court to infer dishonesty from facts which have been pleaded but are consistent with honesty, he was not laying down a general rule that can affect a case like this where there were multiple allegations founding an inference of dishonesty, many of which are themselves allegations of dishonesty that have been found proven."

Nevertheless, there is a need for caution, so I will make all my findings of fact before considering whether any misrepresentation I find proved was 'fraudulent'.

85. Fifthly, with a case with so much evidence as this one - a 10,000-page bundle over 20 years, including multiple witness statements and previous transcripts of witnesses - it would be easy to lose one's way or overlook potential important evidence. I have tried to address this risk by including the next chapter (albeit that it inevitably lengthens the judgment still further), which is a detailed initial review of the whole of the evidence. Again, learning about fact-finding from the criminal and family jurisdictions, I have tried to take an 'iterative' and 'recursive' approach as Peter Jackson LJ suggested in Re A quoted in Powell. It seemed to me the most helpful evidential review would be to tease apart and review the different types of evidence. I will consider them in 'layers', laying one down upon another, cross-checking the accuracy and cogency of each against the previous layers of evidence to gradually work up a clearer picture of events, before 'standing back' as encouraged in Arkhangelsky to make my findings of fact on all the different 'layers' of evidence as a whole, all on the balance of probabilities.

86. Sixthly, as Peter Jackson LJ in Re A also accepted, even on an iterative and recursive approach, it is necessary to 'start somewhere'. I propose to start with the agreed or incontrovertible facts. As Lord Bingham said in 'The Judge as Juror', 'the normal first step is to add to what is common ground between the parties...facts...shown to be incontrovertible'. He gave examples of 'real evidence' like photographs. Moore-Bick LJ also observed in Jafari at [76]:

"[S]ince the final conclusion must be capable of accommodating any facts which are admitted or which are established by evidence which is not capable of being seriously challenged, such facts provide a useful starting point for the assessment of the more controversial parts of the evidence."

87. Seventhly, the next 'layer' of evidence to be considered is contemporary documents. As I have discussed, there may be a paucity of them, or they may be ambivalent or downright deceptive, yet as Males LJ said in Simetra at [49]:

... [I]n a case where there are contemporary documents which appear on their face to provide cogent evidence contrary to the conclusion which the judge proposes to reach, he should explain why they are not to be taken at face value or are outweighed by other compelling considerations...."

I underline that phrase, as in a retrial after a finding of fraud, it may be helpful to differentiate between contemporary documents apparently giving cogent evidence and those which require caution. The reasons for caution could include the document being created by the party found to have forged documents, or even if it was created by third parties, where the information recorded in the document came substantially from the forging party. Of course, on the other hand, there may be unrelated reasons for caution about documents produced by the other party too. It could be alleged to be forged itself, or to be affected by memory fallibility in the way Popplewell LJ described in his lecture as quoted above, or simply to have the sort of 'ambivalence' or unreliability discussed in Bancoult. The point is simply that in a retrial after a finding of fraud - especially forgery - I must be careful that the documents I rely on can bear the weight that I put upon them.

88. Eighthly in a retrial after a judgment is set-aside, it is quite possible the statements from the earlier trials may be available, but the witnesses not re-called. As such their statements are admissible as hearsay, provided there is a Hearsay Notice - see s.1 and 6 Civil Evidence Act 1995 ('CEA') and CPR 33. If not, the statement is still admissible, but the Court must take into account the failure to serve a Hearsay Notice on costs and indeed on the weight of the statement - s.2(4) CEA (see Shagang v HNA [2020] 1 WLR 3549 (SC)) which states:

"Regard may be had, in particular, to the following— (a) whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness; (b) whether the original statement was made contemporaneously with the occurrence or existence of the matters stated; (c) whether the evidence involves multiple hearsay; (d) whether any person involved had any motive to conceal or misrepresent matters; (e) whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose; (f) whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight."

Moreover, I note that Bryan J said in Kekhman at [86]:

"Where the question is one of credibility of witnesses, and competing accounts of events (or the extent of a person's knowledge and involvement) I accept that evidence untested by cross-examination is to be given less weight, but it does not follow that it should be given no weight whatsoever having regard to the circumstances of the case, and any reasons given as to why a particular witness or witnesses were not called to give oral evidence."

However, if a witness is absent for no good reason, adverse inferences can be drawn, as explained by Roth J in Slocom at [40] (and HHJ Williams in Jhutti):

"[I]n Wiszniewski v Manchester HA (1998) Lloyd's Rep Med 223. Brooke LJ set out the...principles (at 240)... "(1)...[A] court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in the action. (2) If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness. (3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue. (4) If the reason for the witness's absence or silence satisfies the court then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified."

89. Ninthly, I turn to oral witness evidence itself. Lord Bingham, in 'The Judge as Juror' identified the following five factors to assist the task of assessing the honesty or reliability of witnesses: (i) the consistency of the witness' evidence with agreed or incontrovertible evidence; (ii) the internal consistency of their evidence; (iii) consistency with what they said on other occasions; (iv) the credit of the witness separate from the litigation, and (v) the demeanour of the witness. He considered the first three factors to be 'a useful pointer to the truth'. He placed less weight on the other two, especially demeanour, to which I will return in a moment. (I have already addressed (iv) in part on the question of past character being relevant - with suitable caution - to inherent probabilities). On a retrial after a judgment is set aside for fraud, there is far more evidential material than usual to assess 'consistency' - including transcripts of evidence at previous trials. However, it is well to remember the risk of what Popplewell LJ called 'single-handed Chinese Whispers'. However, as noted in Arroyo, Smith and Slocom (and as juries are frequently directed) simply because part of a witness' evidence is wrong - or even dishonest - does not stop other parts of their evidence being accepted. More generally, it is important to bear in mind the nature of memory (as discussed in Gestmin at [16]-[21] and elsewhere) to understand the likely effect on a particular witness' memory when weighing their consistency. However, I also bear in mind (as I discuss below at paragraphs 471-3) that in fairness to a witness, they should have the chance to answer challenges to their evidence, which the other party must put to them as well as the other party's case: Chen v Ng [2017] UKPC 27 at [55]; Griffiths v TUI [2023] 3 WLR 1204 (SC) at [70(i)]. In Rea at [52], Newey LJ held that one basis for a judge's finding of undue influence by coercion had not been put to a witness. In writing my own judgment, my own note of cross-examination has been central to all of my findings of fact.

90. Finally, there is 'demeanour', which Lord Bingham in 'The Judge as Juror' defined as 'a witness' conduct, manner, bearing, behaviour, delivery, inflexion: in short anything which characterises their mode of giving evidence but does not appear in a transcript of what they actually said'. Lord Bingham's essay is widely acknowledged as being pivotal to modern judges' wariness of deciding cases based solely on witness 'demeanour'. As Lord Bingham remarked:

"The ability to tell a coherent, plausible and assured story, embellished with snippets of circumstantial detail and laced with occasional shots of life-like forgetfulness is very likely to impress any tribunal of fact. But it is also the hallmark of the confidence trickster down the ages."

Lord Leggatt (as he now is) in his October 2022 lecture: "Would you believe it ? The relevance of demeanour in assessing the truthfulness of witness testimony" (https://www.supremecourt.uk/docs/at-a-glance-keynote-address-lord-leggatt.pdf) argued that psychological research shows demeanour is unreliable. Lady Rose in her lecture pointed to the Equal Treatment Benchbook showing cultural differences may contribute to manner of answers / demeanour. By contrast, Peter Jackson LJ in Re B-M suggested demeanour could tell a court a lot about a witness, so long as 'due allowance [is] made for the pressures that may arise from the process of giving evidence', a phrase also used in Natwest. As Mr Dias KC observed, the real point is demeanour should not be used by itself to assess reliability. This is particularly true with a retrial after a judgment is set aside for fraud, because the 'litigation mindset' is so entrenched and emotions will be raised. It would be wrong to ignore traditional measures of unsatisfactory witness evidence listed by Joanna Smith J in Bahia and HHJ Williams in Jhutti derived from Painter v Hutchinson [2007] EWHC 758 (Ch) where Lewison J (as he then was) mentioned: a. evasive and argumentative answers; b. tangential speeches avoiding the questions; c. blaming legal advisers for the witness' statement; d. disclosure and evidence shortcomings; e. self-contradiction; f. internal inconsistency; g. a shifting case; h. brand new evidence; and i. selective disclosure. Lewison J decided the evidence of one witness should be rejected unless corroborated by indisputable and contemporaneous documents. That is a tried and tested approach which I consider apt for some witnesses here. The same is true of more reliable but still flawed witnesses whose evidence may be accepted unless contradicted by indisputable and contemporaneous documents.

Assessment of the Evidence

91. Consistent with the 'holistic', 'layered' and iterative approach to the evidence I have just set out, before turning to my findings of fact, I survey the various layers of evidence here: (i) agreed and incontrovertible evidence; (ii) contemporary documentation; (iii) valuation evidence; (iv) absent witnesses; (v) non-party witness evidence; and (vi) party evidence (including covert recordings) before finally (vii) taking a brief summary stock-take of all the evidence as a whole.

Agreed and Incontrovertible Evidence

92. Given the animosity and all-out litigation warfare between the parties over the last 15 years, including the forgery, there is a surprising amount of evidence that is essentially agreed or at least incontrovertible. Counsel prepared a detailed chronology running over five pages and spanning over 20 years with all the key events in the case. At trial there was no real dispute about any of those dates, even if there were sharply different accounts of how the events had happened. Indeed, whilst prior to trial the Claimant had disputed the authenticity of documents, that are now no longer challenged, even if the reasons for them are still disputed. That effectively-agreed chronology is therefore the 'base layer' of evidence in my findings of fact, augmented by other agreed and incontrovertible evidence.

93. There is also plenty of incontrovertible 'real evidence': for example, agreed photographs of the Properties over time so that I can actually see the state of their outsides for myself, which assists resolution of the debate over what condition they were actually in. On a linked point, although not 'real evidence' as such, there are important contemporary valuations of at least some if not all the Properties at various points in time: 2002, 2007 and 2009, as well as confirmation of the prices fetched at auction for the Co-Op and Shops in March 2011 and the Cinema in August 2014. Whilst the Claimant relies on the different valuations by her expert surveyor Ms Dobson for transfer in April 2006, those dates of sale and Ms Dobson's inspection in November 2022, the 2002 and 2007 valuations are important, not least as Ms Dobson has not commented on those dates. I will consider the contemporary valuations alongside Ms Dobson's evidence as a separate 'layer' later. The Claimant also agreed the Krishans had paid rates and other arrears on the Properties of £5,672 (and had paid her maintenance totalling £13,800). There is also some agreement as to the level of expenditure on the development by the Defendants between 2006 and 2010, totalling £132,084.83 (although it is not agreed this falls to be offset from any remedy).

94. Moreover, before submissions, the Claimant abandoned her previous primary factual case of a 'custodial contract' - i.e. that their agreement was that Gracefield would simply have the paper title of her properties and manage them for her but also return them on demand as she remained beneficial owner. The last part of that case survives as the Claimant's resulting trust claim, but as Mr Halkerston accepts, that claim presupposes there was in fact no agreement to transfer the beneficial interest to Gracefield in return for a 'profit share'. This concession on the 'custodial contract' (and to a lesser extent the claim for unconscionable bargain) slightly reduced the volume of evidence in real dispute. (The same cannot be said of the dropping of the deceit claim, as the alleged misrepresentations are still part of the actual undue influence claim).

Contemporary Documentation

95. Whilst this is not a case like Gestmin where all the crucial issues are recorded in reliable contemporary documents, nor is it a case like Blue where none are. As I have already said of the chronology, there are abundant documents in relation to most parts of the claim. However, there are no contemporary records of the key conversations in 2005/06 between the parties. The whole trial bundle (not including authorities) runs to 28 bundles, including 10 bundles of documents from 2002 to 2023. Mr Halkerston (who in fairness knew the bundle better than anyone else) estimated it ran to 10,000 pages in all which seems about right. Of course, I was not referred to all those pages - and I explained to Counsel that I would not necessarily read documents that were not raised at trial in some way. However, my 'working bundle' of the documents actually raised in evidence or mentioned in the trial spanned two (extremely full) lever-arch files of well over 1000 pages and I actually read much further into the bundle than simply those documents. This judgment is already too long already without referring to every single document which was raised or that I have read, but I emphasise that I have taken them all into account in reaching my findings and will refer to key documents.

96. However, as I explained above, I consider it helpful to differentiate between contemporary documents which give appear to give cogent evidence and those which I should approach with caution. In the first category, there are numerous documents relating to the Properties prior to July 2005 when the Krishans became involved, when Bobby Takhar and the Claimant were managing the Properties. Those early documents are mostly from apparently independent sources - such as Coventry City Council and their agents such as valuers and property development companies - and I find them obviously reliable and cogent. Nevertheless, to go back to the Purle Judgment, because I have much more evidence of the whole history than HHJ Purle QC did, I have a wider context and so I reach some different conclusions than he did. But I also reach similar ones, such as that Bobby Takhar's plans to re-develop the Properties were considered by Coventry City Council and their agents as unrealistic, not least as the Properties were in a far worse condition than he suggested. It is also clear Coventry CC did tell him about compulsory purchase, but stressed to him that it was a 'last resort'.

97. Moving forward in time to the period after the transfer of the Properties in April 2006 (which no longer forms part of any of the maintained causes of action) there are further documents from independent bodies and professionals: not only Coventry City Council, but also from Mr Johnson whom the Krishans had instructed to develop the Properties and conduct the planning permission process (as well as the contemporary valuation evidence which I will discuss later). Again, I considered all the documentation produced by Mr Johnson and the few documents from Mr Matthews, whom the Claimant instructed in 2008, to be reliable, especially as they were convincing witnesses as I discuss below. Therefore, much of Gracefield's accounts, 'work in progress' logs and director's loan account ledgers prepared by the Krishan's accountant, SB, are also broadly accurate insofar as they are based on the expenditure now agreed. As I shall explain below, I consider that SB - who gave evidence in 2010 but not before me - is a broadly reliable and important witness, even though now a hearsay one.

98. However, that does not mean the accounting documents etc for Gracefield SB prepared in fact reflected reality, insofar as the information which she included came not from an independent professional or third party but from one of the parties. As I shall describe, that is particularly true of crucial documents running up to the transfer. However, picking a different example for the moment, in the 'work in progress' logs and accounts from 2006 onwards until at least 2018, SB included in Gracefields' accounts and records an entry for £225,000 variously described as a 'management fee or charge', 'purchase invoice reserve' and 'purchase reserve'. As I shall explain, this was a figure Dr Krishan conjured out of thin air, which distorted Gracefield's accounts over the years of the litigation.

99. Moreover, documents produced by the parties themselves are still more problematic. The Claimant claimed typed letters purporting to have been written by her were in fact written on the Krishans' computer and indeed effectively written by, or dictated to the Claimant by, Mrs Krishan. Indeed, in some cases, the Claimant says that she simply signed letters put in front of her as she trusted the Krishans so implicitly. In other cases, that apparently self-serving assertion would be taken with a considerable pinch of salt. However, for five reasons quite separate from the Claimant's own evidence, I will find that it is broadly true.

99.1 Firstly, Mrs Krishan accepted in evidence that the Claimant did not have a computer until 2008 and the typed letters in question were produced on the Krishans' computer using their standard letter templates, although she insisted the Claimant had written them, not herself (as was put to her).

99.2 Secondly, this can be seen by comparison of two letters. One is a typed letter the Claimant signed which is to Mr Whiston confirming the transfer of the Properties to Gracefield dated 3^rd March 2006, with her own address centrally at the top. The other is a letter from Mrs Krishan to Mr Whiston of the same date with the Krishans' address in the same place and font with the same rogue apostrophe in the name of SB's firm, suggesting the same person wrote both on the same computer - the Krishans'. Back in her 2009 statement, Mrs Krishan accepted she wrote her own letter that day, but now says the Claimant wrote both. I will find that Mrs Krishan wrote both.

99.3 Thirdly, I will find later that a letter purporting to be from the Claimant dated 4^th July 2005, was probably not drafted by her. She may have an English degree but her language even in the formal context of evidence was far from professional, but emotive and direct. Indeed, Mr Graham pointed to formal vocabulary and syntax in the Claimant's statement: 'I can recall this shift in the tenor and nature of her conversations quite distinctly because it was a marked change' as being inconsistent with her own words and suggestive of having been drafted by someone else. I agree. But I would also make the same point about the wording of the 4^th July 2005 letter e.g. 'I write to formally advise you that I am currently in negotiations to develop the above sites'. This is not the Claimant's own language either. It is the same professional efficient language far more characteristic of Mrs Krishan (a Deputy Headteacher), whom I will find did indeed draft it.

99.4 Fourthly, the 4^th July letter also ends under the Claimant's signature with 'B.K. TAKHAR (MRS)'. This is very different to a handwritten letter dated 6^th April 2006 to the Krishans' solicitor Mr Whiston. The Claimant simply ended her handwritten letter 'Yours Sincerely' and signed. She did not write her name in capitals and put ('MRS') after. Whilst the language is also formal, I will find the Claimant wrote it, but that Mrs Krishan dictated it.

99.5 Fifthly, another letter purporting to be from the Claimant dated 24^th March 2006 is the letter Mr Gasztowicz QC found was the source of the Claimant's signature which led to the forging of the PSA (called 'the Whiston Letter' as it was sent to the solicitor Mr Whiston). Whilst that does not mean it was originally drafted by Mrs Krishan, again the formal language is consistent. Moreover, the Krishans' preparedness to forge a signature reduces the (far lower) inherent unlikelihood that they would draft a letter for the Claimant.

99.6 Fifthly, I will also find below that a letter in the Claimant's name signed by her dated 3^rd April asking Mr Whiston to draft a will and naming the Krishans as executors and the Claimant's three sons as beneficiaries is also consistent with being drafted by Mrs Krishan. This is not just the style, but also the content - it does not mention the Claimant's daughter at all.

99.7 Finally, in his evidence, Dr Krishan did not really deny that the Claimant would sign anything put in front of her. I will find she did just that.

As I discuss below, this view is also consistent with other evidence in the case.

100. Furthermore, some of the documents admittedly produced by the Krishans themselves are downright deceptive. I will detail the five key instances:

100.1 Firstly of course, there is the finding in the Gasztowicz Judgment that they forged the Claimant's signature on the third copy of the PSA they disclosed in the Original Proceedings using the Claimant's handwritten letter to Mr Whiston I mentioned. I discuss below the Krishans' oral evidence about it.

100.2 Secondly, as 'highlighted' in both the Purle and Gasztowicz Judgments, there is the 'Original Balber Takhar Account' document which they each found misleading. I said I would reach my own view about it, but I agree with both my judicial predecessors. The first version was produced by the Krishans (in circumstances described later) for a meeting in March 2008 with the Claimant after she asked the Krishans to stop the proposed sale of the Properties. It listed payments made to and for the Claimant (including rates arrears) from December 2005 to May 2008 totalling £37,100. Whilst that is contested, the real point is that at the foot of the page, it lists a number of items of expenditure on the Properties, then states "Currently out of Premier and Private accounts £556,000 plus two more current bills..." That clearly implies the Krishans had spent £556,000 out of their own bank accounts on the Properties, when in fact the expenditure in Gracefield's own accounts totalled only £132,084.80. Moreover, Gracefield's Director's Loan Account ledger shows in March 2008, less than £20,000 was owing to the Krishans and the balance had never got anywhere near £556,000, not least as the Krishans arranged a debenture for Gracefield secured on the Properties for bank lending of £125,000 (£150,000 from March 2008). Dr and Mrs Krishan told me that he had made a typing error in failing to put the correct number then a full stop and then to continue 'From the company £556,000' meaning what they would receive from the profit share when the Properties were sold on their assumed value at the time (presumably, c.£1.4 million). However, that makes no sense, not least as there is no reference to any such valuation of the Properties in the document and that does not explain why after the £556,000 it actually continued on expenses 'plus two more current bills'. Moreover, over the page, 'Total so far: £565,600' (a different figure) was also sandwiched between discussions of expenses. This was no typing error - I will find on balance of probabilities it was a plain misstatement of the expenditure incurred. I agree with HHJ Purle QC this was done to 'get the Claimant off the fence' and to agree to the sale of the Properties and with Mr Gasztowicz QC that the document was 'demonstrably untrue'. I emphasise that I do not simply adopt their findings, I make my own finding to similar effect, fortified that it accords with theirs.

100.3 Thirdly, as pleaded as part of the conspiracy claim (although given HHJ Purle QC's rejection of it, not causative of loss), when the 'Balber Takhar Account' was disclosed in 2009, it had been altered so that the original reference to 'Total so far: £565,600' had become 'Total estimated approx so far £565,600. Will check'. It is plain that this must have been done by the Krishans - it was their document. It is true this is a small change, but it is important: showing the Krishans trying to soften the original document. It also demonstrates their story to me about an original typing error is wrong, since they amended the document without altering what they themselves said was a typo. I will call this the 'Altered Balber Takhar Account'.

100.4 Fourthly, there is the 'JS Invoice' (as I call it to anonymise the noise and air quality surveyor who carried out an assessment of the cinema in June 2007). An invoice handed to the Claimant in April 2008 dated 14^th June 2007 showed the total cost was £39,045.25. Yet in June 2008, the Krishans handed the Claimant and her financial adviser an altered version of the same invoice now totalling £6,010.13, closer to the entry in Gracefield's accounts of £6,735.78. I have both versions in the bundle yet no explanation from 'JS' themselves. Someone must have altered this invoice. Mr Graham submitted the Krishans had no reason to do so, as it made no difference. But since it is obvious from the Original Balber Takhar account that in April-June 2008, the Krishans were exaggerating costs to pressure the Claimant into selling, I will find on the balance of probabilities that they had every reason to change it, as they later would with the forged PSA.

100.5 Finally, there is the 'Options for Gracefield' document produced by the Krishans for that same June 2008 meetings. Again, both Judge Purle QC and Mr Gasztowicz QC found this document to be deliberately misleading. Once again, on the evidence I have heard and reaching my own view, on the balance of probabilities I will make the same finding as both of them. Each concentrated on the point like the 'Balber Takhar Account' that the development had 'incurred huge costs. Most of these had been met by us personally'. As I have explained, this was not correct as the Krishans had effectively if not entirely been repaid due to the debenture lending. Moreover, both judges criticised the document later added 'Shortly there will also be a £60,000 Corporation Tax Bill'. Dr Krishan said that was a mistake and he meant Capital Gains Tax. As Mr Graham says, it is true that in other respects the document was broadly accurate, save for one point. However, that is the most important one and I quote it (bold in the original):

"When the company was set up 3 years ago the aim was to stop Balber losing the properties in Coventry and to pull her out of debt and prevent bankruptcy. At that stage, the properties had no value and were a liability. The Council was considering Compulsory Purchase Orders and she would have received nothing whatsoever in return."

This is simply wrong, Dr Krishan accepted that he knew that a CPO must compensate the owner full market value. In any event, he also accepted he thought the Properties were worth £300,000 at the time of transfer and so it is impossible to understand how he or Mrs Krishan could have genuinely thought they had 'no value', especially as they believed at the time the Claimant's debt was modest. However, both statements closely resemble the misrepresentations the Claimant says the Krishans made. I will return later to other corroborative evidence from the same time: covert recordings.

Valuation Evidence

101. On the subject of valuation, whilst the expert valuation evidence of the Claimant's surveyor Ms Dobson is clearly relevant to remedies and I return to it in the course of the judgment, it is also useful to consider it now in the context of the documentary evidence of contemporary valuations. That is because the value of the Properties at the time of the transfer in April 2006 is highly relevant to the credibility of the parties as just discussed, as well as to liability and remedies. Before I turn to Ms Dobson's opinion, I will set out the preceding context of the contemporary valuations - and the Council and its agents' contemporary estimates of refurbishment costs. Those assessing costs at least actually saw inside the Properties, whilst Ms Dobson did not. She was only instructed in late 2022 and reported for the first time in January 2023, when the Properties had been sold many years earlier and she was not able to enter them. Therefore, I set out the contemporary valuations and costs estimates first, helpfully set out in the following tables by Mr Graham, which I have slightly altered.

Contemporaneous Valuations

Property	Valuer	Date	Valuation £
2002
Cinema	PPM Valuation Panel Report	2002 (Query 2003?)
Co-Op	PPM Valuation Panel Report	27.11.02	108,000 (existing condition)
2007
Shops	Savills	31.07.07	210,000 (with PP)
Cinema	Savills	01 08 07	450,000 (with PP)
Co-Op	Savills	01 08 07	425,000 (with PP)
2009
Shops	Chamberlains	31 03 09	120,000 (without PP)
Cinema	Chamberlains	31 03 09	165,000 (if demolished)
Co-Op	Chamberlains	31 03 09	215,000 (current condition, without PP)
2011
Shops	Sale Price	21 03 11	175,000
Ritz	Sale Price	14 08 14	191,000
Co-Op	Sale Price	29 03 11	675,000

Refurbishment Costs

Property	Source	Date	Est. cost £
2002-03

Co-Op	Panel Valuation	27.11.02	750,000

Co-Op	Barneveld Surveyors	04.03.03	£677,000 Or £400,000 for 'much lower' spec
2005
Cinema	Donaldsons	12.07.05	1,035,000 as drama centre
Co-Op	Donaldsons	12.07.05	867,100
2006
Cinema	Donaldsons	30.01.06	£606,000
Co-Op	Donaldsons	30.01.06	£925,000
2007
Cinema	Mr Johnson Indicative Budget Cost Estimate	Jan 07	£1,434,484
Co-Op	Mr Johnson RJ's Indicative Budget Cost Estimate	Jan 07	£1,831,507

102. There is a striking disparity between the 2006 costs estimate by Coventry CC's agent Donaldsons and Mr Johnson's costs estimate only the following year which was twice as much. The reason is not entirely clear from Mr Johnson's 'indicative budget cost estimate', but I suspect his proposed works differed from Donaldsons proposal of 12 flats on the Cinema site and retail unit and 12 flats on the Co-Op site. Of course, there is no contemporary valuation of the Shops until 2007 and no refurbishment costs estimate of them at all. Moreover, we only have costs for developing the Cinema from 2005, so we do not have the costs of demolishing it in 2002, which may well have been factored into its valuation then of £160,000. However, the upshot of those contemporary documents we do have is as follows:

102.1 In 2002-03, valuations suggested the Cinema land was worth £160,000 if demolished; and the Co-Op £108,000 as it was, but would cost £250,000 to refurbish and by 2003 that Co-Op cost estimate had risen to at least £400,000 (for 'lower spec') or up to £677,000. Therefore, the Properties were clearly in bad state and needed a lot of money spending on them. This is consistent with the Council's contemporary notes based on inspections. It is clearly inconsistent with the Claimant and Bobby Takhar's evidence.

102.2 In 2005-06 when the Krishans became involved with the Properties up to the point of transfer, the last valuation was 3 years old, but they were not formally re-valued (whilst Mr Graham included the parties' agreed total valuation of £300,000, which I accept was agreed, it was the parties' estimate, not a professional valuer - a point I return to later). However, there had been a recent estimate of refurbishment costs by Donaldsons for Bobby Takhar's idea of re-developing into a literature and drama centre the Co-Op costing £867,100 or Cinema costing over £1 million. It is hardly surprising that the brief for Donaldsons from Coventry CC in May 2005 had in noting the old valuations for the Co-Op of £108,000 and the Cinema as £160,000 (where entry for a structural survey was refused) described the 'owner' as 'unrealistic' (I suspect by then a reference to Bobby Takhar then dealing with it, rather than his mother the Claimant). The Donaldson's costs estimate in January 2006 was on the basis of what it called 'a more commercially viable alternative use of commercial use on ground floor and residential development above' - much closer to the Krishans' plans by then. In short, such development would cost much less than Bobby Takhar's worthy but unrealistic dreams of community projects and would obviously be worth more on future sale to a potential developer, like the Krishans.

102.3 By May 2007 when Savills valued the Properties on a loan security basis for Natwest Bank, they were still undeveloped, but did have planning permission (it was only anticipated for the Cinema, but granted later that year). The valuations for each of the Properties were much higher. The Shops (not previously valued) were valued at £210,000, the Co-Op's value had leapt from £108,000 in 2002 to £425,000 in 2007; and the Cinema's value had leapt from £160,000 in 2002 to £450,000 in 2007. The Properties in total were worth £1,085,000. That rise was more to do with the state of the market than planning permission - Savills commented 'Purchasers are paying a premium for properties that were derelict or in need of refurbishment, with or without planning consent'. Given that, it seems unlikely planning permission had more than trebled the value of the Properties in only a year since the transfers in March/April 2006. So, it seems likely that £300,000 was much too low, on valuations already 2 or 3 years old for the Co-Op and Cinema and no valuation of the Shops.

102.4 However by March 2009, the value of the Properties had supposedly fallen: on Chamberlains' valuations, the Properties collectively were worth £495,000 - less than half Savills' valuation two years earlier. But this assumed no planning permission, even though it would not lapse on the Shops until December 2009, on the Co-Op until March 2010 and the Cinema until December 2010. This seems like a surprisingly low valuation on an unrealistic basis, as the Properties did still have planning permission. But by 2009, litigation had begun, so their value was probably 'blighted' - certainly this valuation is out of kilter with the others and the later prices.

102.5 The 'valuations' of the Shops and Co-Op in March 2011 and Cinema in August 2014 are not valuations at all, but sale prices at auction, by which time planning permission had lapsed on them all. In that sense, those prices were what the market was prepared to pay for them in its purest form, but not necessarily comparable to the earlier professional valuations. In any event, the total gross 'yield' of the Properties to Gracefield was £1,041,000 - not much different from their valuation with planning permission in 2007.

103. Against that context, I will turn to Ms Dobson's reports, initially in January 2023 but amended (but without changing her valuations) in November 2023 following receipt of further documentation, including some of the historic costs documents from Coventry CC / Donaldsons and the 2009 Chamberlain valuations. Her valuation conclusions were helpfully set out by Mr Halkerston as follows:

April 2006	Without ('Pre') Works	After ('Post') Works
Co-Op	£450,000	N/A
Shops	£240,000	N/A
Cinema	£200,000	N/A
Total	£890,000	N/A
2011/2014
Co-Op (March 2011)	£700,000	£800,000
Shops (March 2011	£300,000	£375,000
Cinema (August 2014)	£250,000	£300,000
Total	£1,250,000	£1,475,000
November 2022
Co-Op	£950,000	£1,150,000
Shops	£380,000	£540,000
Cinema	£500,000	£550,000
Total	£1,830,000	£2,240,000

104. Mr Graham submitted that not only were Ms Dobson's valuations reached without entering any of the Properties; both of her reports contain errors; the valuations in each are the same even though the second report accepted the condition of the Properties was worse; and she calculated costs for refurbishment, despite that being outside her particular expertise (it required a quantity surveyor), by using generic tools in the first report, but (out of date) contemporary costs estimates in the second. Above all, she did not set out her methodology or calculations for either the 'pre-works' or 'post-works' valuations. I do accept her reports lost sight of the wood for the trees and left questions unanswered. However, they cannot be characterised, as Mr Graham did, as just 'bare ipse dixit', as Lord Hodge said in TUI v Griffiths [2023] 3 WLR 1204 (SC) [37]:

"Because an expert's task is to assist the judge in matters outside the judge's expertise, and it is the judge's role to decide the case, the quality of an expert's reasoning is of prime importance. This court gave guidance on the role of the expert in Kennedy v Cordia [2016] 1 WLR 597...[at 48]:

"An expert must explain the basis of his or her evidence when it is not personal observation or sensation; mere assertion or bare ipse dixit carries little weight, as the Lord President (Cooper) famously stated in Davie v Magistrates of Edinburgh 1953 SC 34, 40. If anything, the suggestion that an unsubstantiated ipse dixit carries little weight is understated; in our view such evidence is worthless.... Wessels JA stated the matter well in....South Africa in Coopers...Ltd v Deutsche Gesellschaft 1976 (3) SA 352, 371......Proper evaluation of the opinion can only be undertaken if the process of reasoning which led to the conclusion, including the premises from which the reasoning proceeds, are disclosed by the expert. As Lord Prosser pithily stated in Dingley v Chief Constable 1998 SC 548, 604: As with judicial or other opinions, what carries weight is the reasoning, not the conclusion."

As Lord Hodge said in TUI at [73], this is not just leaving questions unanswered.

105. Moreover, applying by analogy the criteria in Kennedy at [44] for expert evidence admissibility to its weight, there is no doubt about Ms Dobson's expertise (save on costings) and body of knowledge underpinning it; and I would add she was plainly impartial and trying to assist the Court, especially in her oral evidence:

105.1 For the 'pre-works' values in April 2006, Ms Dobson clarified in oral evidence that in her first report at paras.17.0.1-5, she had benchmarked her valuations against Savills' loan security valuations in 2007 with planning permission for the Co-Op of £425,000, the Cinema of £450,000 and Shops of £210,000. She noted Savills had said 'Purchasers are paying a premium for properties that were derelict or in need of refurbishment, with or without planning consent' and their loan security valuation for the bank would have been more conservative than open market value. So, Ms Dobson considered in the same 'hot market' of 2006-07 in April 2006, planning permission would make little difference, but on the open market, the Co-Op would have been worth more (£450,000) and the Shops more (£240,000). However, she valued the Cinema lower at £200,000. Properly explained, I accept as accurate on the balance of probabilities her total for April 2006 of £890,000.

105.2 For the pre-works values at sale in 2011 / 2014, Ms Dobson in her report at paras.18.10-26 and oral evidence also adopted a straightforward and reasonable method: whether sale prices could have been enhanced. I accept limiting the auction to cash buyers reduced the Cinema in August 2014 from its value of £250,000 to its actual price of £191,000; and the Co-Op in March-May 2011 from value of £700,000 to actual price of £675,000. I also accept the price of the Shops were depressed to £175,000 by cash auction as one 'job lot', especially as only one was structurally unsound. But Ms Dobson estimated an average value of £80,000 which comes not to £300,000 (where she assumed planning permission) but £240,000 - the same as April 2006 (like similar properties in the location). Therefore, I find on balance of probabilities the total value in 2011/14 was £1,190,000.

105.3 However, I accept that Ms Dobson's 'post-works' valuations for 2011/14 and rental income estimates were unreliable. There were too many hypotheses as the Properties were not in lettable condition. The same applies to a 2022 'post-works' valuation of the still-unrefurbished Cinema.

105.4 Yet, the 'post-works' valuations by Ms Dobson for November 2022 for the Co-Op (£1,150,000) and Shops (£540,000) are reliable as they were based on reality. As she noted at para.18.12 of her first report, the Co-Op had in fact been sold in 2016 for £1,320,000 in 2016; and at para 16.8.5, she corroborated her valuation of the Shops if sold separately of £540,000 was corroborated by sale of a neighbouring property in July 2021 for £202,000.

105.5 Likewise, the 'pre-works' valuations for 2022 by Ms Dobson are based on those reliable 'post-works' figures. As explained in her first report at paras.16.9.10-17 and oral evidence, she worked out the 'pre-works' value by taking the average value per square foot from comparables and deducting from the 'post works' values average costs using industry-standard software in the first report, calibrated against the extra information in the second. This seems to me a perfectly reliable approach and I accept her 2022 'pre-works' valuations of the Co-Op at £950,000 and Shops at £380,000 and indeed £500,000 for the Cinema. The total is £1,830,000.

Absent Witness Evidence

106. I turn to the statements from absent witnesses. Statements from the trials in 2010 and 2020 of witnesses not called before me are hearsay. (Strictly speaking, the previous statements from current parties and witnesses are also hearsay, but I will consider some parts of those when considering their evidence to me).

107. Firstly, there are the Claimant's now-absent witnesses (except her solicitors):

107.1 Mr Duncan and Mr Todd were dealing with the Properties for Coventry City Council from 2004/2005 through to 2008. Whilst Mr Duncan and Mr Todd did not give evidence before me, their statements were not challenged and so they were not recalled. Each of them confirmed there were never any Compulsory Purchase Orders ('CPO's) in respect of the Properties. There was only an oblique reference to CPOs in a Cabinet report in 2006 and some discussion about CPOs with Bobby Takhar in 2005 (confirmed by an important note from June 2005 which I detail in my findings of fact). But they confirmed what he was told then - use of CPOs is always a last resort for the Council. There was never even a Cabinet report drawn up to consider CPOs - the first stage in what in law is a long process. Whilst Mr Duncan and Mr Todd did not detail it, Counsel and myself researched the CPO process using legislation and Government Guidance. In brief summary, a local authority resolves to make a CPO (what Mr Todd called a Cabinet report at Coventry CC), but if a CPO is made, there can then be effectively an appeal to the Secretary of State and even if a CPO is upheld, subject to Council debts, effectively full market value is paid in compensation.

107.2 Mrs Har Hari's (also known as Mrs Kaur) evidence was largely peripheral, although I touch on part of it later. However, given her absence, under s.4 CEA I can only attach very modest weight indeed to Mrs Har Hari's (and another absent witness, Mrs Meade's) multiple hearsay statements reporting what the Claimant said about her state of mind in 2005. Further, Mrs Clowe's statement is unsigned and undated, so I will ignore it totally.

108. Secondly, there are the Defendants' now-absent witnesses (except the solicitors). I need only touch on Mrs Beeston who witnessed the transfers, as is now agreed.

108.1 Mr Whiston's pre-PD 57AC statement now seems like a rather 'of its time' chronology of documents that adds relatively little to them, but is a helpful guide in its way. He summarised being instructed by a letter from the Claimant of 3^rd March 2006 (which I have found above was drafted by Mrs Krishan) and that he did not meet the Claimant until after the transfers when she instructed him to prepare a will. His evidence is not challenged.

108.2 Mr Rodgers was Gracefield's banker at Natwest from early 2006. His evidence had two points of relevance. Firstly, that Dr Krishan told him then the Claimant had no business acumen, which Dr Krishan denies. Secondly, Mr Rodgers said that he advised him in late 2006 that one of the 'principals' of Gracefield - 25%+ shareholders - had adverse credit data (the Claimant had a CCJ) and this led to the Claimant transferring all 50% (i.e. not just all but 24%) of her Gracefield shares to the Krishans. As I will explain addressing Dr Krishan's evidence below, I prefer Mr Rodgers' recollection as painting an accurate picture of how Dr Krishan saw the Claimant.

109. Finally, I come to the evidence of SB, who is by far the most important of the now-absent witnesses. If the others' absence is understandable, SB's absence requires explanation. After all, she drafted the PSA on which the Krishans later forged the Claimant's signature, leading to the Purle Judgment being set aside. She gave evidence to HHJ Purle QC that he accepted at [18]. However, the reason SB is not giving evidence to me is simple - and the same as the reason why I have anonymised her name, as did Mr Gasztowicz QC in his judgment (calling SB 'Mrs A' and her firm 'X'). At the set aside trial before him in 2020, the Krishans did not call SB because at that stage they were alleging that either she or someone else at her firm had forged the Claimant's signature because they had lost the original copy the Claimant had signed. Mr Gasztowicz QC said this at [86]-[87]:

".... It seems to me most unlikely that Mrs A or anyone at X would have [forged the PSA]...It would elevate an act of negligence (...never...alleged) into a serious fraud and attempt to pervert the course of justice (which if discovered would have been added on top of such negligence). Furthermore, if they had lost a copy which had been returned signed and wanted to behave dishonestly... they could simply have continued with the line that they had no copy of it, and said that it must therefore never have been returned, there being no documentary or other independent evidence to the contrary....In contrast, the Defendants had every reason to forge [it]."

I have considered whether I should draw an adverse inference against the Defendants under the Wiszniewski principles from the absence of SB. However, Mr Halkerston did not invite me to do so and the reason for SB's absence now is clear and obvious, even if it reflects little credit on the Krishans' attempt to 'throw her under the bus'. Therefore, I draw no adverse inference against them from it, but must still consider the weight I can attach to it under s.4 CEA considering the contents of SBs' evidence. I apply the criteria under s.4(2) CEA: (a) given the Krishan's self-inflicted estrangement with SB, it would not have been practicable for them to call her; (b) her 2009 statement and 2010 evidence were not contemporaneous with her key involvement in 2006 but she produced documents and her evidence is more reliable at least insofar as it is consistent with them; (c) there is no multiple hearsay (since what SB reports as having been told is not relevant as evidence of the matter stated, but as evidence of who told her, as I explain); (d) SB in her evidence in 2009-2010 had no motive to conceal or misrepresent matters and her reliability was endorsed by HHJ Purle QC and her integrity by Mr Gasztowicz QC in 2020; and (e) I will find her original evidence was edited to some extent and I will bear that in mind; (f) the circumstances of the admission of SB's evidence now deny me seeing her cross-examined especially on what is now known to be the forged PSA, reducing the weight of her evidence, as Bryan J said in Kekhman at [86]. However, unlike there, I have a detailed transcript of SB's cross-examination on other topics in 2010 and know her evidence was accepted, so my disadvantage in not seeing her cross-examined myself on those topics is much less, especially as 'demeanour' is not determinative. So I attach significant weight to SB's evidence so far as it is supported by her contemporary notes, although given her 'editing' she would have had other questions to answer. Moreover, SB's evidence cuts both ways and so is broadly fair. On one hand it undermines the Claimant's account that she was unaware of the terms of the transfers. On the other, as I will show, it also significantly undermines the Krishans' evidence on what the terms actually were.

110. SB's evidence in brief was that she was instructed by the Krishans to incorporate Gracefield in November 2005 on the basis of the Claimant having a 50% shareholding, with the Krishans 25% each. SB confirmed her initial meeting about Gracefield was with Dr Krishan at his home (when discussing other business) and he mentioned the Properties owned by the Claimant and the plan to transfer them to the company, develop and sell them and split the proceeds. SB first met the Claimant with the Krishans at their home on 20^th January 2006 and SB took a contemporary note of that (which I will find to be accurate) where the market value of £300,000 for the Properties was confirmed as was deferred payment to the Claimant of it and a 50/50 profit share. Before a second meeting to discuss the tax efficiency of the different options, SB prepared another note summarised in her statement at [16]:

"On 20^th February 2006, I had a further meeting with the Krishans and the Claimant. In advance of that meeting, I made a note of the consequences of the properties being transferred at either £100,000 (being their value in the event that they were subject to a Compulsory Purchase Order) or £300,000 (being the estimated market value. Both of these values had been advised to me by Dr Krishan and, I believe, were what had been agreed by all concerned as representing fair and realistic values." (my underline)

SB was cross-examined on the second note and meeting and said that the decision between the options was not in the end 'based on tax but on the financing of the development'; and they went with the option 'with regards to using the value that was attributed to the compulsory purchase order of the properties' (i.e. £100,000) and she was advised of that figure 'by the directors', she could not remember who (although in her statement she said it was Dr Krishan). SB answered she was not aware that in law the CPO value was the market value and said 'I was advised that if the properties were subject to [CPO] they would be worth significantly less'. SB accepted her (in law incorrect) understanding led to the Claimant's initial deferred payment being £100,000 in Gracefield's director's loan account to be paid along with another £200,000 and 50% of the net proceeds when the Properties were sold. SB's statement went on to discuss that she had confirmed to Mr Whiston on 15^th March 2006 that: the Properties would be transferred to Gracefield for a total of £100,000 'reflecting the value placed on them by the Council with regard to potential [CPO]s'. SB said she wrote to the Claimant on the same date to confirm the payment for the Properties was £100,000 but she was also preparing a profit share agreement for further sums when the Properties were sold as 'we are transferring the properties at the value of the [CPO] rather than...development value', which did not contain a copy of the PSA. SB then detailed how she prepared that and its terms (as I noted at the start, it did not mention the Krishans' 50% share). SB also said she did not discuss the PSA with the Claimant or post it to her - she passed a copy for her to Dr Krishan and the copy with the Claimant's (later proven to be forged) signature was misfiled and she had no idea where the original was. However, whilst SB's statement and evidence said she received a copy from the Claimant, that was 'edited' indeed inaccurate, as in a later-disclosed version, she actually said Mrs Krishan handed it to her in 2009 and that the Krishans signed the PSA after the event. Finally, SB's statement discussed the transfer of shares from the Claimant to the Krishans (as Mr Rodgers discussed) and her eventual removal as a director of Gracefield; and she prepared its accounts. She said the £225k charge was Dr Krishan's idea.

Non-Party Live Witnesses

111. I can now deal with these witnesses in the usual way by briefly summarising my impression of their evidence. Following on from SB, for the Defendant, there was Sally Smith, Richard Johnson (who I have mentioned already), Dennis Webb, Suzanne Davies and Dr Sudhir Handa. For the Claimant, there was Peter Matthews (whom I have again mentioned already) and lastly, a 'semi-party' witness - the Claimant's son Sukhjinder ('Bobby') Singh Takhar.

112. Ms Smith was not called to give live evidence as her statement was agreed and so I accept her evidence is entirely reliable. In fairness, it also adds relatively little - Ms Smith was an auction manager responsible for the marketing of the Properties in 2008 and their eventual auction - the Co-Op and Shops in 2011 and Cinema in 2014. Whilst she gives useful evidence about the poor condition of the Properties, she cannot remember any details of the auction, even the sale prices.

113. Mr Johnson's evidence I have already indicated I found broadly reliable. He struggled at times with his memory (amusingly, even his own address as he had not long moved), especially how many times he had actually met the Claimant. Mr Johnson also gave evidence to HHJ Purle QC in 2010, but that did not necessary give him an advantage with memory. As if to illustrate the problems with its fallibility that I have discussed, in his 2009 statement he recalled meeting the Claimant twice: once in February 2006 after having been instructed by and met Dr Krishan in December 2005; and again, at the opening of Dr Krishan's new surgery in Wolverhampton in September 2007. Yet in his 2022 statement for this trial, Mr Johnson only recalled meeting the Claimant at the 2010 trial itself. Since the Claimant accepts meeting him in 2007, I accept they did then. However, I also find he may be muddled about the February 2006 meeting - and indeed a telephone call which he mentioned in neither statement. However, Mr Johnson clearly did work diligently on the project after transfer of the Properties in April 2006, liaising with the Council and its agents, as well as various other professionals (such as 'JS' whose invoice was amended). Mr Johnson confirmed the poor state of the Properties but arranged no repairs as applications for planning permission were pending. Mr Johnson was also taken through all the expenditure in Gracefield's 'work in progress logs' (except Dr Krishan's £225,000 'management charge') up to June 2010 totalling £132,084.83 and confirmed it had all had been spent, which is now agreed to have happened (if not that it should be credited as I said above).

114. Mrs Davies is the widow of John Davies who sadly died in March 2010, just before the first trial. As Dr Krishan was his doctor, it is understandable that she wishes to assist him. Mr Davies was in the business of office refurbishment and introduced him to Mr Johnson in 2006. He certainly made a note in November 2005 which refers to the Krishans and the Claimant and discusses the context and the agreement. I accept the note suggests the Claimant was present. Mrs Davies was not there - the person referred to was Mr Davies' secretary Joan. I do not accept that Mrs Davies would remember her husband telling her at the time in 2005 about such an inconsequential meeting where all he did was recommend an architect. However, I do accept he would have told her later about the dispute after it broke out in 2008, especially as she had by then met the Claimant in 2007. However, given the forgery, I can attach no weight to Mrs Davies' multiple hearsay evidence about what another now-deceased witness, Linda Hunt, told her.

115. Indeed, this same Linda Hunt popped up in the evidence of Mr Webb, another patient of Dr Krishan, and Dr Handa, a fellow GP, also both evidently keen to support Dr Krishan. Mr Webb's other evidence was again hearsay conversations with Mr Davies who was negative about the Properties, but I find again this is most likely to have been after the dispute erupted in 2008. However, Mr Webb briefly mentioned Linda Hunt had emphasised the Claimant's clear animosity towards Dr Krishan to him. Like Mrs Davies, Dr Handa said he remembered Linda Hunt reporting that the Claimant had told her she was going to photocopy a signature onto a document rather than physically signing it because she did not want any comeback from HMRC or DWP (the Claimant was on benefits and later investigated about the Properties, but no action taken). This anecdote seems to have been deployed by the Krishans through Dr Handa to insinuate the Claimant herself forged her signature, which actually Dr Krishan openly alleged in evidence. Given the Gasztowicz Judgment, that is untenable. Overall, my impression of the mysterious Linda Hunt is that she was very close to the Krishans, but disliked the Claimant and was willing to make wild accusations about her to all and sundry, so I totally ignore what she said. Speaking of wild accusations, Dr Handa also accused the Claimant of trying to ruin Dr Krishan with complaints including a 2011 outcome letter saying she wrote vindictive letters. However, that was based on an interview with Dr Krishan who had a motive for implicating her, not the Claimant herself. One anonymous letter, which is the bundle, was in my judgement clearly written by the Claimant's estranged husband Parminder Singh Takhar (informally known as 'Bill'), who has mental health issues and is clearly also angry with the Krishans. Whilst I am no expert, the handwriting and content of the letter is similar to a letter signed and named Parminder Takhar which is also strongly critical of the Krishans. Therefore, the evidence of Mr Webb and Dr Handa did not really assist me at all.

116. Turning to the Claimant's witnesses, I found Mr Matthews to be an impressive witness. He runs a number of companies and is clearly an expert on properties. He was introduced to the Claimant by her friend Mrs Kaur in March 2008 after the Claimant was upset that the Properties had been marketed and she had objected to that to Mrs Krishan (which was the start of the deterioration of their relationship). He was concerned from his initial discussion with the Claimant, who mentioned that in 2005 she had been worried about the Properties being compulsory purchased and her getting nothing. Mr Matthews knew that could not happen. He also felt the Claimant lacked understanding in other practical ways. He also saw the outside of the Properties and felt mortgages could be raised on them (as the Krishans had done with the debenture on Gracefield). Yet even the best witnesses after 15 years have memory issues - I find Mr Matthews mixed-up in his evidence which 'JS Invoice' he saw first. He said in 2009 and I accept it was the forged one first, as makes more sense. In June 2008, he met the Krishans and the Claimant, where he agreed sale was reasonable plan (although not what the Claimant wanted to do), but the Krishans gave him the (lower) JS Invoice and 'Options for Gracefield' and gently challenged them, which is when he said 'the mood changed' and so he ended the meeting. He could see those documents were misleading (for similar reasons as I have already discussed about them) and told the Claimant that he suspected fraud by the Krishans. It was his involvement and strong suspicion of foul play which led to the Claimant covertly recording conversations with Mrs Krishan in May before and then after that June meeting.

117. However, before I turn to those recordings, the last 'non-party' witness is Bobby Takhar. Yet in reality, he is a party in all but name. In the courtroom, the person sat behind Mr Halkerston who seemed to be giving instructions was not the Claimant but Bobby Takhar. He was also apparently the person who first spotted the PSA had been forged and pressed for the Purle Judgment to be set aside. Bobby (as I shall call him) was evidently emotional when discussing the Properties, especially the Co-Op. It was a well-known property in the area which his father Parminder ('Bill') had bought at a time when he was in partnership with his now-estranged brother Inderjit (known informally as 'Ian') as the 'Takhar Trading Company' ('TTC'), having arrived in the UK with nothing and built up the business through hard work over many years. As I shall explain later, Bobby and his mother the Claimant plainly saw the Properties as 'family properties', formally owned by the Claimant but on behalf of Bill but not Ian. Whilst in the Original Proceedings, the Claimant's case was that she held the Properties on trust for TCC, I will find it was much simpler - Bill owned and gifted the Properties to the Claimant who owned them absolutely, as the Krishans originally pleaded. Therefore, it is not really an appropriate case to examine the interface between the ancient English concept of the trust and the complex cultural web of 'interests' in properties regarded as owned communally within more traditional British Asian families (the only analysis I am aware of is Sir William Blackburne's fascinating judgment in Singh v Singh [2014] EWHC 1060 (Ch)).

118. Like HHJ Purle QC, I find Bobby Takhar had a rather rose-tinted view of the Properties - at least the Co-Op and the Shops (again which had a lot of history within the family) and in evidence minimised the state of their disrepair evident from all the contemporary evidence. It is a classic example of what Popplewell LJ in his lecture described as an individual's deeply-held beliefs affecting the 'encoding', 'storage' and 'retrieval' of long-term memories. I also agree with HHJ Purle QC that Bobby Takhar's claim to have not 'picked up on' Coventry CC's warning of the possibility of CPOs as a 'last resort' at a meeting on 30^th June 2005 is implausible. I will find Bobby wanted to get an informal 'power of attorney' (in essence written authorisation) to deal with the Properties and told his mother what Coventry CC had said and she told the Krishans, who then stepped in - what Bobby called their 'power grab'. I will find this 'not picking up on the CPOs' was his genuine memory - but not of what happened, but how he remembered feeling when the Krishans emphasised the seriousness of CPOs. Indeed, I will find he gave a clear and consistent account of what they said.

119. HHJ Purle QC inferred from Bobby' Takhar's rejection of offers that he was open to selling the Properties. In fairness, when seen in that wider family and cultural context, I find that evidence is more consistent with Bobby's evidence that the family did not want to sell the Properties to normal developers, as he was determined to develop them as community assets, especially the Co-Op. Indeed, he said in evidence whilst he accepted the family could not have developed both, the Cinema was an 'outlier' which Bill had bought, whereas the Co-Op was 'the jewel in their crown' and if necessary to develop it, the family would have sold the Cinema, which I will find below at paragraph 569 would have happened by April 2006 absent the Krishans. Overall, except insofar as it is contradicted by independent and reliable contemporary documents (as on the condition of the Properties), I accept the evidence of Bobby Takhar as honest and otherwise fair.

The Parties

120. I turn now finally to the evidence of the Claimant and the Krishans. It is a reflection of the complexity of the fact-finding in this case that it is the first case I recall hearing when no Counsel sought to persuade me their own client was a satisfactory witness. However, before their actual evidence, I should deal with the covert recordings the Claimant took of conversations with Mrs Krishan in May-June 2008. On 19^th May, she covertly recorded two conversations. I do not accept the Claimant's suggestion that this was initially inadvertent on her mobile phone. After all, she was already concerned enough about the mounting costs of the project suggested by the 'Balber Takhar Account' to instruct Mr Matthews. I find that she was 'fishing for evidence'. I find that she lied about why she did this as she did not want to be criticised for doing it deliberately, although she freely accepted she recorded the second and third calls deliberately. In the light of that, giving myself a Lucas direction, I accept this minor lie does not undermine her other evidence, but I bear it in mind. That being the case, the observations of HHJ Cooke in Singh at [8]-[12] quoted in part above are useful:

"8... The essence of the claimant's claim is as to matters he says were agreed in private between himself and the first defendant, the truth of which would only be known to the two of them and, perhaps, to anyone they had subsequently told about their arrangements. This is not an uncommon situation, and the court is frequently required to decide between the conflicting accounts given long after the fact of private and undocumented arrangements by reference to such documents and contemporary evidence as exists and to the actual behaviour of the parties, which may allow inferences to be drawn about their private agreements and so which of the accounts now presented is more reliable. The decision is ultimately as between the credibility of the oral evidence of the competing parties.....

11. In this case however I have the direct evidence of the recordings made by the claimant. It is true to say that these must be approached with some caution, as there is always a risk that where one party knows a conversation is being recorded but the other does not the content may be manipulated with a view to drawing the party who is unaware into some statement that can be taken out of context. But there can be great value in what is said in such circumstances, where the parties plainly know the truth of the matters they are discussing and are talking (at least on one side) freely about them.

12. Such documentation as there is tends to favour the defendant, but that cannot be conclusive where the nature of the documents is said to be to assist in presentation of a false picture to the outside world and not to reflect the arrangements privately agreed. Even on the basis of those documents however, there are serious doubts about the plausibility of the defendants' version of events. As will be seen, the transcripts of the recorded conversations in my view take the matter beyond doubt and show that the account given by the claimant, on the essential matters, is to be preferred."

(HHJ Cooke did not cite Jones v Warwick University [2003] 1 WLR 954, where the Court of Appeal held that covert recording even within the other party's home was admissible, but made the defendant pay the costs of the issue. However, in my judgment HHJ Cooke's analysis is entirely consistent with it. In any event, no objection was taken by the Defendants to the covert recordings' admissibility).

121. As HHJ Cooke said in Singh, it is always necessary to approach covert recordings with caution, especially on what the recording party said, but sometimes they can yield real evidential insight and do so here. Mrs Krishan said that in the first two calls on 19^th May 2008 (as I will explain, there was a third on 30^th June after the Matthews meeting) she was at work, distracted and unwilling to go into detail on the call, so did not hear or correct some of things the Claimant said. However, the transcripts of the two calls on 19^th May do not show Mrs Krishan suggesting talking another time when she was not busy. In fact, they had two long calls when she did most of the talking. The Claimant repeated her concerns about the costs (she already had been given the Balber Takhar Account saying £556,000 had been spent of the Krishans' own money). Yet Mrs Krishan made a number of statements consistent with the lies in the Options for Gracefield document and which are clearly phrased as her own opinion, not repeating back to the Claimant what the latter had said in 2005/06 as Mrs Krishan claimed in cross-examination:

121.1 Firstly, Mrs Krishan stressed she was helping the Claimant as family:

First Call: "[Claimant]...[Y]ou are spending a really excessive amount. [Mrs Krishan] We are yes, we have to, we have got another six months at least of this, all right and then you know we should be able to sort of move forward, all right. These things just take time, you know, but I looked at them yesterday and I thought there is no way my sister [a reference to the Claimant, even though they were cousins] is actually going to get caught up in the hands of Inderjit [the Claimant's brother-in-law, known in the family as 'Ian'] because I know how you feel and I don't want anybody associated with him tackling it because you know what they'll do, they'll sub let it to him or they'll give it further on to him, and I am not having that. I think - I don't know why but it's a question of family honour, almost."

Second Call: "[Mrs Krishan] I don't do anything without you, but I do protect your interests...[T]he only thing that really mattered to me was when you told me you didn't really want to lose it, and I thought well you've got to have something as well. What bothered me was - well I've got so much and you've got nothing really in that sense."

121.2 Secondly, Mrs Krishan said the Properties in 2005/06 were 'worthless':

First Call: "[Claimant] I'm not sure what choice was there [to do with the Properties] to be quite honest. [Mrs Krishan] Well precisely, because by the time you paid everything back there was nothing there. When you look at the balance sheet, right, if you had paid everything back, everything owing to the Council, everything owing to everybody, right, I mean they were actually worthless on paper. There was nothing there. I know you like to think that, yes, you know, they are there, but they are actually worthless."

121.3 Thirdly, Mrs Krishan effectively said they had spent £500,000:

First Call: "[Claimant] Suddenly you see you have spent £500,000, I mean that is a lot of money, that is a huge amount. [Mrs Krishan] I know it is. [Claimant] That is a humungous amount of money. [Mrs Krishan] Yes. But it was either that and making them viable or letting them go under completely."

121.4 Fourthly, Mrs Krishan told Claimant she risked being made bankrupt:

Second Call: "[Claimant] I am just concerned with all the money that you are...you know...[Mrs Krishan] Well yes you have...to do things, you know to build up anything you have to do that...I mean how else could we have done it, right. The only other alternative open to us was that they go, and that they take them off [a reference from before to the Council] and you know, they pay some of the debts and they [sic - presumably she meant 'you'] are made bankrupt."

121.5 Fifthly, that the Krishans had no benefit themselves from the Properties:

Second Call "[Claimant referring to estranged husband 'Bill' working hard] [Mrs Krishan] "But hang on a minute....Why do you think we have fought so hard for you not to have lost them and to get them to this stage where they are viable. It's not been any benefit to us...I have no vested interest in them, but I know you have because that's your life, all right and you think clearly some time why. I mean they were at a stage where you would have lost them, whether you know, how would you then look up to Bill, your children, everybody, right."

122. A fortnight after these calls, there was the meeting on 9^th June 2008 between the Claimant, her son and Mr Matthews on one side and the Krishans on the other that I mentioned, after which he told the Claimant he suspected the Krishans of fraud. The Claimant's third covert recording weeks later on 30^th June 2008 needs to be seen in that context. It also needs to be seen in the light of a letter on 25^th June 2008 from Coventry CC giving formal notice under s.215 Town and Country Planning Act 1990 (a purely planning not compulsory purchase power) the Claimant had to either demolish or refurbish the Cinema within 28 days. Indeed, the tone of the call was different, Mrs Krishan said if the Claimant was not happy with what they had done, she could deal with them and also that:

[Mrs Krishan] "I mean we did say it was going to be 50/50 on everything we did." [The Claimant] "Yes" [Mrs Krishan] Right, so whatever the values are now, you know I mean is you are willing to sort of pay us off then we are quite happy with that."

The Defendants point to the Claimant's acknowledgement of 50/50, which is important. Yet otherwise, Mrs Krishan repeated her themes from the earlier calls, talking about the letter from Coventry CC about the Cinema sent to the Claimant:

"...[A]lthough we are handling it the property is yours."

Mrs Krishan linked back the Council's letter about planning to the (different) question of Compulsory Purchase Orders ('CPO's):

"[Claimant] I have been very appreciative, I have been very, very appreciative, in fact you don't know how appreciative I am, okay. I don't think you realise that. [Mrs Krishan] Really, when the first lot of CPO orders came, maybe, you know, it would have been better had we not done anything and they had just been taken off, and it would have left you absolutely nothing." [At the end, just as the Claimant was saying goodbye, Mrs Krishan added the following]: "[W]e are still sort of going back to the stage where we are saddled with CPOs and everything else again."

123. Looking at these calls in the round, whilst the Claimant clearly was hoping to obtain evidence from Mrs Krishan's own mouth, this plainly succeeded. Mrs Krishan was not aware she was being recorded and so had her guard down, rather like the internal emails Males LJ discussed in Simetra. She clearly wanted to take the opportunity to cajole and in the third call outright pressure the Claimant into agreeing with their plans for the Properties by 'reminding' her - not of what the Claimant had said in 2005/06 but what Mrs Krishan presented as 'home truths' about the situation back then (and by 30^th June 2008, 'again'). The recordings give strong corroboration to the Claimant's evidence that Mrs Krishan said similar things in 2005/06. I will refer to this as Mrs Krishan's 'rescue narrative' to the Claimant - this is my term, not the Claimant's nor Counsel's and I simply use it as shorthand to avoid confusion in a very long judgment to refer to what the Claimant's solicitors in correspondence called the Krishans' 'campaign'. The calls also show (again my terms as shorthand) Mrs Krishan using both 'carrot' (e.g. 'I don't do anything without you, but I do protect your interests') and 'stick' (e.g. 'When the first lot of CPO orders came, maybe it would have been better had we not done anything and they had just been taken off, and...left you absolutely nothing'). It is arguable whether those covert recordings are 'hearsay', they are tendered to show not the truth of the matter stated, but what Mrs Krishan was stating, said to be untrue. Yet if 'hearsay', but for the purposes of s.4 CEA 1995, I have already explained why I give them considerable weight, not least as they were first-hand hearsay from the period, if not contemporaneous with 2005/06; Mrs Krishan had no motive to conceal (just the opposite), Mrs Krishan's answers were freely her own and there is nothing preventing their evaluation.

124. Yet I must now turn to my impression of the Claimant's own evidence. As Mr Graham said on behalf of the Defendants, she is clearly an intelligent and articulate lady. She has a degree in English Literature and Cultural Studies from Warwick University, worked in the family business, was a trainee teacher at a school and then taught herself yoga and now teaches it. Yet her evidence planned to last a day (always optimistic) actually lasted 2½ days, because for the first 1½ days, she was an incredibly difficult witness, manifesting many of the poor habits criticised in Painter. She was argumentative, avoided answering questions, rambled long discursive answers with unimportant information and contradicted herself. She made speeches and snide or sarcastic remarks. She turned herself away melodramatically. Rather than politely disagreeing with Mr Graham's questions, she would 'perform' an irritatingly histrionic 'Please !'. At certain points, she gave absurd answers, like saying she thought 'drawings' in the context of a company were little pictures. Mr Graham's patience and determination was commendable. Time and again, I had to tell her to calm down and simply answer the question. He very fairly described my interventions as 'increasingly firm'.

125. However, on the third morning, after having been delayed on the motorway in the cold, a very different Claimant turned up for the last day of her evidence - and we made ten times the progress as we had the first 1½ days. She was quiet, thoughtful and aside from a couple of flashes of (more understandable) emotion, she mostly simply answered the questions calmly and clearly. It was as if a completely different witness was giving evidence. When I complimented the Claimant on the change in her demeanour (a word I use deliberately as I will explain), she said that she was now 'all out of emotion'. That, it seems to me, is the key to understanding both her original antics then her total volte-face.

126. I remind myself that I should not assess a witness based solely on demeanour, but it can be relevant, with allowances made for the pressures, as said in Natwest. While I was not taken to the transcripts of the Claimant's evidence in 2010 and 2020, I have read them. Under long and detailed cross-examination then, at times the Claimant rambled and was emotional, but that was distress, not anger. For example, before Mr Gasztowicz QC, the Claimant was cross-examined at length by the Krishans' then Counsel about benefit fraud, said to go to her credit. She rambled about it, but the upshot was that the DWP investigated in 2009-10 but took no action. Despite the Krishans' insinuation of fraud by her in a trial about fraud by them, there was no explosion of emotion and histrionics. The Claimant then (and in 2010) was like she was with myself on the third day: reasonable.

127. In fact, it was telling that the Claimant was not taken in cross-examination before me, even on the last day when being reasonable, to her previous statements or transcripts of evidence at the 2010 and 2020 trials to reveal any inconsistencies, as Mr Halkerston later did with the Krishans. I was acutely conscious Mr Graham and Mr Perring had precious little time to prepare for trial, which is one reason that I read her transcripts myself. However, such was their professionalism, I am sure they will have read the Claimant's long previous statements, as I also did. Whilst I may have missed a few needles in the haystacks (and will make some references to the previous statements), there were few inconsistencies in the content of what she said, even if her demeanour in evidence was very different.

128. So, what am I to make of the Claimant's 'Jekyll and Hyde' evidence to me ? In my judgement, her broad consistency in content over the three trials and her latterly calm evidence - and even concessions - suggests that she genuinely believed what she was telling me. I find that she was an essentially honest witness. Especially given that abrupt change, it would be simplistic to attribute the Claimant's histrionics for the first 1½ days as her consciously 'lying'. That would be a reversion to simplistic reliance on 'demeanour' Lord Bingham deprecated. However, her demeanour does have an impact on her reliability as a witness. Ultimately, the Claimant is plainly a very emotional person. I remind myself of Lord Pearce's wise warning in Onassis that 'emotional witnesses who feel morally in the right easily and unconsciously conjure up legal rights that do not exist'. As Leggatt J said in Gestmin and Popplewell LJ elaborated in his lecture, the 'storage' and 'retrieval' of memory can be distorted by emotions, beliefs and a 'litigation mindset'. At paragraph 70, I suggested that would be a particular risk in a retrial after a finding of fraud. After 15 years of battling the Krishans over the Properties, the Claimant's litigation mindset is more entrenched than most. She is particularly indignant that she sees herself as having trusted the Krishans as family and them as having betrayed her trust, as she implied towards the end of her evidence. Moreover, her anger has been particularly stoked by the fraud in 2009-10 which lost her chance to recover her Properties. Her evident anger in the first 1½ days led her to do something she did not do in 2010 or 2020 - simply dismiss a question or evidence simply because it came from the Krishans - like meetings with or contemporary notes of SB or Mr Davies, even though I will find they partly support her case. In any event, insofar as the Claimant's evidence is contradicted by contemporary documentation from professionals neither prepared by or derived from the Krishans, I will prefer that documentary evidence.

129. However, insofar as the Claimant's evidence is only contradicted by the Krishans' evidence, in particular their discussions about the Properties in 2005/06, I prefer at least the core (if not all details) of the Claimant's recollection, for five reasons:

129.1 Firstly, I find it is the Claimant's emotional personality that is key to what she genuinely remembers. She was not interested in any intellectual challenge or financial gain in developing the Properties. As she said in evidence she is not a 'numbers person' and preferred for Bill, Bobby or the Krishans to manage the Properties than herself. I find what is solidly 'encoded' in, 'stored' and 'retrieved' from the Claimant's memory is not facts and figures but emotions. This is why she rambled so much - at times into reverie - each time she gave evidence. Over the years with repeated re-telling, whilst the Claimant soon forgot dry meetings with professionals like SB and Mr Davies, the memories that have stayed with her clearly are the strong emotions she experienced: most vividly the shock of discovering the auction in March 2008. However, I also accept the Claimant can also accurately recall her own emotions in 2005/06. As I explain in my findings of fact, at that time she was emotionally vulnerable and very worried about what to do with the Properties which were emotionally important to her and her family - especially after Bobby told her there was talk of CPOs in June 2005. She reached out to Mrs Krishan for help and reacted to their intervention with heightened relief and gratitude. Essentially, she felt they were helping her 'as an act of charity' - her perception then, even if she angrily rejects the phrase now. She believed they were protecting her from financial ruin and saving her family's properties. This is consistent with her implicitly trusting the Krishans and then deferring entirely to them, even to the point of simply signing letters they put in front of her. Yet, crucially I also accept the Claimant remembers that 'rescue narrative' broadly clearly as she also clearly recalls being 'fed' it repeatedly by Mrs Krishan.

129.2 Secondly, whilst the Claimant's anger led her to reject reliable evidence (even if it partly supported her case), her clear and consistent recollection under cross-examination time and again in 2010, 2020 and 2023 that she was repeatedly fed 'the rescue narrative' by Mrs Krishan is itself notable. As Lord Bingham said in 'the Judge as Juror', a key tool in assessing the reliability of oral evidence is consistency - (i) internally in a witness' current evidence (which on discussions with the Krishans the Claimant's was, as just explained); (ii) with their evidence on previous occasions (again broadly consistent, as I said above); and (iii) with other evidence (why I prefer professionals' notes to the Claimant's recollection, but hers on the discussions with the Krishans where she is to an extent corroborated, as I will explain). Following Arroyo and Smith, the fact I have rejected her evidence if contradicted by contemporary documents, does not mean I must reject her evidence if not contradicted by them, still less supported. Nor does the Claimant's 'demeanour' for the first 1½ days of cross-examination lead me to reject all her evidence, especially as I have considered and accepted the reason for that demeanour and because it changed so markedly.

129.3 Thirdly, as I have just said, I find the Claimant's account of the discussions with the Krishans is corroborated by some contemporary documents - especially her recollection that the Krishans repeatedly said the Properties were likely to be subject to CPOs and that if so, they would be 'worthless'. That is consistent with what the Krishans told her in 2008 in the 'Options for Gracefield' document. It is also consistent with SB's recollection that she was asked to value the Properties not at 'market value' of £300,000, but at £100,000 (much closer to the Claimant's debt and so more 'worthless') as if subject to CPOs, that they were plainly not. I will find SB was told by Dr Krishan as she said in her statement even if her oral evidence was vague.

129.4 Fourthly, as I discussed above, the covert recordings in 2008 strongly corroborate the Claimant's account of Mrs Krishan's 'rescue narrative' (as I call it) in 2005/06, not only on the alleged 'CPOs likely' and 'Properties worthless' misrepresentations, but on the Claimant's recollection of being 'fed the rescue narrative' (as I put it) more generally by Mrs Krishan. In the covert recordings, rather than repeating back what the Claimant had said in 2005/06, Mrs Krishan gave the impression that she was repeating what she had told the Claimant then. Certainly, in the covert recordings, it is Mrs Krishan, not the Claimant, who is repeating the various parts of the 'rescue narrative': that she was helping the Claimant as family, not for their own personal benefit; that the Properties in 2005/06 were 'worthless'; and if the Properties were subject to CPOs, the Claimant would have been 'bankrupt'. I have quoted the material passages just above and need not repeat them. Of course, it is true Mrs Krishan does not explicitly say that she told the Claimant the same thing in 2005/06, but her comment is entirely consistent with that. It is also true that I found the Claimant did not tell me the truth in evidence that her decision to record was deliberate not accident, but giving myself a Lucas warning, it is clear that was a lie out of concern that she may be criticised for doing something wrong in covertly recording, rather than a lie undermining the rest of her evidence, although I do bear it in mind.

129.5 Finally, as I said, one party's dishonesty does not itself make the other party honest. But I prefer the Claimant's rambling, emotional but broadly reliable memory of undocumented conversations with the Krishans to their accounts - smooth and polished, but I am driven to conclude, seriously unreliable.

130. Before I turn to my reasons for that conclusion, it is important to distinguish observations on a witness' reliability or even honesty on particular parts of their evidence from an inference of dishonesty on a cause of action, which must be on all the evidence - see Three Rivers and Jafari-Fine. Indeed, I remind myself that even if a witness lies about one aspect of their evidence, that does not mean they have lied about anything else, especially what they are alleged to have lied about at the time which forms the core of the cause of action. Indeed, as I have already said, I found the Claimant lied - in part - about how she came to make the covert recordings in 2008, but I found there was a clear explanation for that minor lie which does not undermine the rest of her evidence, although I bear it in mind. Moreover, just like the Claimant, the Krishans were giving evidence about events up to 18 years ago and it is only fair to make allowances for memory fallibility and 'forgetting' for them too. In fairness, much of their evidence as to timelines, meetings and work done on the Properties is supported by contemporary documents prepared by professionals I consider to be reliable. Nevertheless, I must focus on the reliability of their evidence as to their undocumented discussions with the Claimant from July 2005 to April 2006 about the transfer of the Properties; and on their conduct during the dispute and litigation in 2008-10.

131. It is particularly important that I remind myself the finding that the Krishans had lied and forged the Claimant's signature in the Gasztowicz Judgment does not mean they are not being honest in evidence to me. As said in so many contexts since Lucas 40 years ago, witnesses can often lie and for different reasons. Lies in themselves do not necessarily mean the entirety of the evidence of a witness should be rejected. A witness may lie in a stupid attempt to bolster a case, but the actual case nevertheless remains good irrespective of the lie. A witness may lie because the case is a lie. Likewise, the fact that a witness has been dishonest about part of their evidence does not mean that the whole of their evidence is dishonest - and that a witness' evidence may be wrong in the absence of dishonesty through distorted recollection - as indeed is true of the Claimant as I have discussed.

132. But whilst a 'Lucas Direction' reminds judges that witnesses may have lied in the past to bolster a true account, as Males LJ said in Arkangelsky at [120] - that:

In this case, the Krishans have been found to have committed a serious fraud, as Lord Briggs said of the (then-alleged) forgery in the Supreme Court at [89]:

"If proven it was a very serious, pre-meditated, carefully planned and executed fraud which was instrumental in the defeat of Mrs Takhar's claim, and plainly aimed from start to finish at deceiving the court about the central issue in the case."

Indeed, after Mr Gasztowicz QC found the forgery proved, when ordering them to pay indemnity costs, he said in his costs judgment at [9]:

"[The Krishans] not only forged a key document in support of their case with a view to deceiving the court in the original action (which worked), but also went on oath in the present action to lie about what they had done and to seek to deflect blame for the forgery onto third party professionals, who were not before the court."

Of course, the Krishans were not obliged to accept the finding of forgery, but as Mr Perring put it, they are 'stuck with it'. (As I have said, in my judgment, it gives rise to an issue estoppel on the conspiracy claim). Again, they did not have to give any explanation for it, but as they maintained their innocence in the face of the finding and indeed the evidence on which it was based, they can hardly be surprised if they are accused of being untruthful about other things as well. The Krishans did not say (as they could easily have done were their case true), that they forged the Claimant's signature out of frustration to bolster their true case knowing the Claimant had agreed to the PSA and was now herself lying in denying doing so. Instead, they defiantly asserted their innocence and even tried to minimise Mr Gasztowicz QC's finding (that they did not appeal) by suggesting he only made the finding 'on the balance of probabilities'. That was his job and it is also my job to make findings on the balance of probabilities. His finding of forgery plainly reduces the inherent improbability of other dishonesty by the Krishans. This includes reducing the 'inherent improbability' of undue influence, which Newey LJ recently discussed at [32] of Rea v Rea [2024] EWCA Civ 169.

133. Especially in the light of the suggestion that Mr Halkerston did not 'put his case' on conspiracy as I discuss in more detail below, it may be helpful to discuss the evidence in cross-examination of the Krishans more generally. The trial was planned to last 8 days. In the end, because of the Claimant's behaviour in evidence, we finished her case two days behind schedule. Whilst I initially wanted to see whether we could recover the timetable, I was persuaded by Counsel that we should go part-heard for two days of submissions. However, we all agreed that all the evidence had to be finished within the remaining days of the original trial. Therefore, I limited Mr Halkerston's cross-examination, even though he had more witnesses to cross-examine (and indeed two main witnesses, not one). So, we all agreed that he would divide up his cross-examination between Dr Krishan and Mrs Krishan, rather than having to put every topic to them both. As Lord Hodge said in TUI, at [70(vii)] such a 'guillotine' on cross-examination is relevant to the 'flexibility' of the rule that a party is required to challenge in cross-examination every material part of their evidence which he will submit the Court should reject; and indeed, what Newey LJ in Rea at [52] called 'the (overlapping) obligation on a party to put his case to a witness with relevant knowledge'.

134. In my view, Mr Halkerston fairly but clearly exposed Mrs Krishans's evidence across the whole scope of the case to be seriously unreliable. Working backwards:

134.1 As I noted above when dealing with issue estoppel, I was not expecting to hear detailed cross-examination on the forgery of the PSA, because the Gasztowicz Judgement had already determined that the Krishans had forged the Claimant's signature and deployed it in the Original Proceedings. However, Mrs Krishan's 2022 statement gave a new account not given to either HHJ Purle QC or Mr Gasztowicz QC about 2008 emails disclosed by her then-solicitors in 2022. She claimed in October 2008 she found a copy of the PSA she believed was signed by the Claimant and gave it to SB around that time; but also that the Krishans re-signed a new copy of the PSA they had originally signed in 2006 which SB's firm had earlier misplaced. However, Mrs Krishan said she had forgotten to mention any of this, even at the trial in 2020 about the forgery of the PSA and had left disclosure of her emails to her solicitors then. Whilst as I have explained, I felt this issue was foreclosed by issue estoppel, which would have meant that Mr Halkerston actually did not have to cross-examine about it, he actively chose to do so and to put the Claimant's case. Indeed, he put in detail to Mrs Krishan the emails and the findings in the Gasztowicz Judgment. It is true that he did not say the word 'conspiracy' to her, but she had plenty of opportunity in cross-examination to answer his clear charge that she and Dr Krishan had got together to forge the Claimant's signature on the PSA to use it to win the Original Proceedings and had deliberately not disclosed the emails revealing them doing so until her then-solicitors properly disclosed them for her in 2022. As I will detail later in my findings of fact, I reject the evidence of Mrs Krishan on this issue. If her story had been true, one would have expected it to have been front and centre of her evidence in 2020 at least, not prompted in 2022 by emails which she had 'forgotten about' despite being highly material to the set-aside trial. Moreover, it is telling that the 'discovery' of the PSA in the email she did not disclose to him was on 25^th October 2008 - the day after the Claimant issued her claim. I will find that was the date of their forgery.

134.2 Mr Halkerston also put to Mrs Krishan that the documents the Krishans produced earlier in 2008 - especially the 'Balber Takhar Account' and 'Options for Gracefield' documents - were misleading, as HHJ Purle QC and Mr Gasztowicz QC had already found, with which I agree for the reasons detailed at paragraph 100 above. She suggested the Balber Takhar Account was typed badly by her husband, but the revised version was also put to her which had not changed that. She suggested that 'Options for Gracefield' in saying the Claimant would have got 'nothing whatsoever in return' from CPOs was what she had told them, not their lie. Yet it was plainly wrong but tallies with what she said in the 2008 covert recordings.

134.3 Mr Halkerston also put to Mrs Krishan various passages from those covert recordings, which I have summarised at paragraphs 121-122 above. He put to her they showed she had told the Claimant back in 2005/06 there had been CPOs, she was at risk of bankruptcy and losing properties or that they were worthless. She denied that and said all that was what the Claimant had told them at that time. However, Mrs Krishan simply did not say that in any of those covert recordings, as she would surely have done in 2008 if that happened in 2005-06 ('But you told me...' etc was absent). Instead, as I have said, it was Mrs Krishan doing the talking, emphasising her 'rescue narrative'. As I have said, those recordings are more consistent with the Claimant's account that back in 2005/06, it was Mrs Krishan saying them.

134.4 Whilst Mr Halkerston indicated (without objection) that he would direct his cross-examination on the actual development of the Properties from 2006-2008 on Dr Krishan who was dealing with it, he did put key moments to her. In particular, on the abortive auction of the Co-Op in March/April 2008 he pointed out to her that her 2022 evidence that the Claimant had suggested the agent Loveitts contradicted her 2009 statement which said no such thing which she did not adequately explain. Similarly, Mr Halkerston also put to Mrs Krishan the inconsistency between her 2022 and 2009 statements on whose idea it had been in Summer 2006 for the Claimant to transfer one share in Gracefield to her so the Krishans had 51% to avoid deadlock - in 2009 Mrs Krishan said it was her idea but in 2022 the Claimant's idea. Again, Mrs Krishan did not explain this (or a later 49% share transfer).

134.5 However, of course perhaps the longest topic in Mr Halkerston's cross-examination of Mrs Krishan was what their discussions had been in 2005/06 leading up to the transfers. Because of its importance to the undue influence and resulting trust claims, I will deal with the evidence on this below in a separate section of my findings of fact. However, Mr Halkerston took Mrs Krishan in detail through the documents, to her previous statements and transcripts of her evidence. Yet again I will find Mrs Krishan's evidence as between 2009/2010 and 2022/2023 was internally contradictory; and externally contradictory not only with what she said herself in those 2008 covert recordings, but also with some of the same contemporary documents in 2005-06 which the Krishans relied on to challenge the Claimant's evidence about this whole period. Indeed, on that point, those documents clearly show it took four months from the Claimant authorising Dr Krishan on 4^th July 2005 to his instruction of professionals in November. I will find that does not fit Mrs Krishan's account that the Claimant was desperate for help. It is more consistent with the latter's that Mrs Krishan persuaded her.

135. Turning to Dr Krishan, again I am satisfied Mr Halkerston fairly but clearly exposed his evidence across the whole case to be seriously unreliable:

135.1 Mr Halkerston again cross-examined Dr Krishan in detail about the forging of the PSA, going through the contemporary documents methodically and clearly putting his case that they showed the Krishans were both involved in the forgery and how it was distributed to professionals and in the litigation, including March 2009 emails showing Dr Krishan insisting it be referred to in their Defence. Albeit again Mr Halkerston did not actually use the word 'conspiracy', that was obvious. Dr Krishan adopted the same brand-new account as Mrs Krishan about her finding a signed copy of the PSA and them signing two copies - one in relation to the forgery of the PSA and her new story about finding another copy. Indeed, Dr Krishan went even further in cross-examination, at one point in denying that they forged the PSA, he even briefly suggested the Claimant may have done so herself. It is one thing for a judge to remind themselves that a witness' dishonesty on a previous occasion does not mean they are lying now. It is quite another thing if that witness makes wild accusations which fly in the face of the previous finding of dishonesty by them. Indeed, I note the Krishans have made other wild accusations about the Claimant by proxy by calling Dr Handa, Mr Webb and Mrs Davies to talk about the mysterious Linda Hunt.

135.2 In the light of Mrs Krishan's evidence that Dr Krishan typed the 'Balber Takhar Account', prepared 'Options for Gracefield' and dealt with costs of the development such as the JS Invoice, Mr Halkerston took Dr Krishan through them and squarely put to him they were deliberately misleading, as HHJ Purle QC and Mr Gasztowicz QC had concluded. Again, Dr Krishan went even further, admitting the JS Invoice had been forged but accusing the Claimant of doing it: not put to her. On 'Options for Gracefield' saying with a CPO she 'would have received nothing whatsoever in return', he actually accepted he knew that a CPO entitles the owner to full market value (less any debts to the council), but that 'had not come up' with the Claimant. Yet in 2010, he admitted he told her in 2005/06 she could lose the Properties through CPOs, but denied knowing how they worked, so he has completely changed his story. Moreover, when challenged about his evidence that it was the Claimant's idea to transfer the Properties to a company, Dr Krishan said it was due to her benefits, Council Tax arrears and a requirement to demolish the Cinema. When pointed out he had not mentioned CPOs, he said 'it had not occurred to him' to mention it. I will find she did not mention them, he did and indeed the transfer to Gracefield was his idea. As I said, I will come back to the key four month period in July-November 2005 later.

135.3 Mr Halkerston also put to Dr Krishan that SB in her 2009 statement (if not her more vague evidence) said he had told her of the market value of the Properties of £300,000 - or £100,000 if subject to a CPO (as she noted for the February 2006 meeting). However, Dr Krishan claimed his (then) witness SB was wrong and indeed that the Claimant had come up with that difference in value, which he accepted was incorrect. However, Dr Krishan made much in 2005 of his own business experience. His suggestion that he had absolutely no idea of the value of the Properties and just took the Claimant's word and outdated valuations beggars belief. I will find later he (rightly) believed them to be worth much more than £300,000.

135.4 This is reinforced by a related point about 'business acumen'. As I mentioned earlier when discussing Mr Rodgers' hearsay evidence, he recalled Dr Krishan telling him when arranging Gracefield's banking that the Claimant had 'no business acumen', yet when Mr Halkerston put that to Dr Krishan, he denied it and asserted she did have business acumen. He could offer no good reason why Mr Rodgers would have got that wrong. Moreover, Mr Halkerston put to Dr Krishan that he had deliberately tricked the Claimant into transferring all her remaining 49% shareholding in Gracefield in late 2006, again pointing to Mr Rodgers' statement which said he had told Dr Krishan that only 'principals' with 25% of the shares needed to pass the credit check, as Dr Krishan admitted in his 2009 statement. However, in his evidence to me, Dr Krishan said he did not know that at the time, which is why he did not explain to the Claimant that she did not need to transfer all her shares to Mrs Krishan due to the bank. I will find the omission deliberate. But in any event his evidence is internally inconsistent.

135.5 Dr Krishan's current evidence was in places inconsistent even with itself. Mr Halkerston challenged the 'management fee' of £225,000 which he asked SB to include in Gracefield's accounts. Dr Krishan said it was consistent with the 15-20% uplift that professional developers charge and was an alternative to the profit share if the Claimant backed out of the deal. Therefore, he said he asked SB to remove it after the 2010 trial, as the profit share had been upheld in the Purle Judgment (on the counterclaim). However, as Mr Halkerston took Dr Krishan through year after year of accounts after 2010, the management fee still stubbornly appeared, prompting different and more tenuous explanations from Dr Krishan each time. Moreover, as Mr Halkerston says, there is no evidence whatsoever that 15-20% is the going rate, I would add especially where a 'developer' arranges practically no refurbishment work on a project at all in over 5 years As I said above, in my view Dr Krishan plucked £225,000 out of thin air as his 'insurance policy' that he could charge if the profit share agreement (which as I will describe was never properly 'formalised') was not effective. Even Dr Krishan did not claim he had ever agreed it with the Claimant.

136. For all these reasons, individually and cumulatively in relation to both Dr Krishan and Mrs Krishan, I find that substantial parts of their evidence were seriously unreliable. This is not the Lucas error of 'they lied before, so they must be lying again'. It is rather 'they lied before and they are seriously unreliable again'. I reach that view on the evidence they gave me in 2023, quite separately from the finding of dishonesty in 2020. As a result, similar to Painter, I consider that I can place no reliance on their evidence unless corroborated by indisputable and contemporaneous documents, such as the records of meetings with professionals.

Holistically Taking Stock

137. As I discussed in detail in the previous section, I have set out in great detail those various 'layers' of evidence in endeavouring to take a 'holistic' approach to the evidence to my findings of fact. I have not simply focussed on contemporaneous documents as in Gestmin, although they are very important as stressed in Simetra. I consider this approach to be consistent with guidance in cases such as Natwest, Arkangelsky, Powell (and Kekhman on 'circumstantial evidence').

138. I now propose to 'stand back' (as suggested in Arkangelsky) and look at all those 'layers' of evidence together, iteratively and in the round, to illustrate my fact-finding process. In doing so, I find I can summarise ten key points drawn from the whole of the evidence, which then form the 'skeleton' of my findings of fact which then follow. Whilst I will need to make particularly detailed findings of fact on the period between July 2005 and the transfers in April 2006 and the run-up to litigation in 2008, I can take the intervening period from 2006 to 2008 much more swiftly, as it is no longer the focus of the remaining causes of action.

139. Those ten key points drawn from all the layers of evidence are as follows:

139.1 Firstly, the Claimant is an intelligent but also a very emotional person, disinterested in business (even if she grew up in a family business) and with scant recollection of what she clearly sees as dry details related to business. As she put it, she is 'not a numbers person'. In other words, as Dr Krishan told Mr Rodgers, the Claimant has 'no business acumen' and that is how he and his wife saw her. By comparison, he is an experienced businessman.

139.2 Secondly, the Claimant had ownership of the Properties but was not really interested in them, preferring to leave management to others like her husband or son (indeed, early on she tried to distance herself from them). In 2003, Bobby Takhar had taken on responsibility for them, but like his mother, he too 'was not a numbers person' and his plans for the Properties were obviously thought by Coventry CC to be wholly unrealistic.

139.3 Thirdly, this was in part because Bobby and his mother the Claimant were strongly emotionally-attached to the Properties which Bill and Ian acquired. They also had a rose-tinted view of their condition, which was in fact poor, as confirmed by voluminous independent contemporary documentation.

139.4 Fourthly, by June 2005, Coventry CC were losing patience and warned Bobby that CPOs could be obtained, but as I shall explain, they consistently stressed it was a 'last resort'. The evidence from the Council, both contemporary documents and statements in the Original Proceedings from Mr Duncan and Mr Todd show there was never any real risk of CPOs being made; and even if they had been the Claimant would have been entitled to full market value, less (relatively modest) debts to the Council.

139.5 Fifthly, Dr Krishan not Bobby was authorised by the Claimant to deal with the Properties on her behalf from July 2005. Whilst their condition was poor, they had development opportunity and their true value in 2006 was almost three times the £300,000 extrapolated from valuations in 2002/2003. The Claimant had no interest in the market value of the Properties since she did not want to sell them, as she saw them as 'family properties'.

139.6 Sixthly, there is little reliable contemporary documentation recording the conversations between the Claimant and the Krishans about the Properties from July 2005 until around the time of the incorporation of Gracefield in November 2005. It is clear that by the end of this period, the Claimant started being financially supported by the Krishans. She was paid £5,000 by Mrs Krishan in July 2005 and £400 a month from December 2005 (until September 2007). As a result, in the next 'chapter', after some background findings, but before making findings of fact about that period, I will undertake a further assessment of the evidence focussed on that period.

139.7 Seventhly, once Gracefield was incorporated in November 2005 with the parties as directors and shareholders (50% to the Claimant, 25% each to Dr and Mrs Krishan), professionals became involved, including Mr Davies, SB, Mr Whiston and Mr Johnson. Their documents substantially improve the contemporary evidential record. Mr Davies recommended Mr Johnson as an architect who planned the development; whilst SB as accountant and Mr Whiston as a solicitor arranged the transfers in March/April 2006.

139.8 Eighthly, SB was told the market value of the Properties was £300,000 and their value subject to CPOs was £100,000. It is agreed that was wrong. I need to make detailed findings of fact about who told SB that and why. The Krishans say those came from the Claimant, she says they came from them.

139.9 Ninthly, once the Properties were transferred to Gracefield in April 2006, the Claimant had very few dealings with them and by the end of 2006, was persuaded by the Krishans to give up her shareholding (and directorship). I will find they also tried to auction the Co-Op in March 2008, which led to the dispute and to the Krishans' production of the 2008 false documents.

139.10 Finally however, rather than this pressure succeeding in getting the Claimant to acquiesce in the Krishans' plan to sell the Properties, she instructed Mr Matthews. He met them, considered the documents and told the Claimant he suspected fraud in June 2008. By late July 2008, she had instructed solicitors and by late October 2008, she had issued proceedings. I will make findings about the date and circumstances in which during those proceedings the Krishans forged the Claimant's signature on the copy PSA.

140. Against that context, I can finally turn now to my findings of fact. As I have just illustrated, I will make each of them 'iteratively' by considering all the layers of evidence that I have analysed in detail, sometimes referring to my general assessment of the evidence in giving reasons for my findings. However, given the lack of documents for 2005, I will review the evidence on that before making detailed findings on 2005-06, before briefly on 2006-07, then more detail on 2008 and the litigation up to 2010.

Findings of Fact

141. This long chapter of my judgment is in five sections: (i) the parties and properties up to June 2005; (ii) my assessment of the evidence on the key period from July to November 2005 when the Krishans became involved and Gracefield was incorporated; (iii) my findings of fact from July 2005 to the transfers in April 2006; (iv) developing the Properties from 2006-2007; and (v) the dispute and litigation from 2008-2014, although I focus on particular aspects of the litigation, as I have already set out the full procedural history.

The Parties and Properties up to June 2005

142. The Claimant was born in 1952 and her younger cousin the Third Defendant, Parkash Krishan was born in 1954. Her father was one of five brothers, of whom the Claimant's father was the youngest. Their families had moved to England from India in the 1950s and they were very close as children. Mrs Krishan in her 2009 statement strikingly described the Claimant as 'like a sister to me'. The Claimant in her 2022 statement said that she 'regarded Parkash as the sister I never had'. Likewise, Mrs Krishan's 2009 statement recalled that she had grown up in Wolverhampton and the Claimant in neighbouring Wednesfield, but she remembered the families saw each other almost every weekend. They would play together all the time. Mrs Krishan said she looked up to her slightly older cousin, whilst the Claimant said that she saw herself as 'the big sister'.

143. However, they began to grow apart in the 1970s. Mrs Krishan's father died in 1970 and whilst the Claimant supported her, including paying for her school trip to Wales, it appeared a family argument broke out over his land in India. Moreover, in 1972, the Claimant married Parminder Singh Takhar (known as 'Bill') and whilst Mrs Krishan attended the wedding, they fell out of contact afterwards. Bill's family was very traditional and felt that as the Claimant was entering their family in Coventry, she had to reduce ties to the Black Country.

144. Mrs Krishan went on to marry Dr Krishan in 1975, but the Claimant did not come to their wedding. Mrs Krishan took two degrees, became a teacher and since 1990 has been a Deputy Headteacher in Wolverhampton and sometimes an Acting Headteacher. Dr Krishan became a successful GP in Wolverhampton. Moreover, he also developed related businesses. SB and her firm began acting for him in 2002 and she later reported that another company he ran was developing a new Health Centre in Wolverhampton with a £2.1 million build cost (this was opened in September 2007 where the Claimant met Mr Johnson). Moreover, in an August 2005 letter to Coventry PCT, Dr Krishan said he had 'experience with health centre developments and currently have one in Wolverhampton' so I infer that he had undertaken such projects before. Therefore, Dr and Mrs Krishan were (and are) both successful professionals.

145. Life took a very different path for the Claimant. From Bobby's first statement, I note that Bill and his father had started a grocery shop in Foleshill in Coventry in the 1960s, which steadily grew into the Takhar Trading Company ('TTC'), which despite its title was actually a family partnership. Bill's younger brother Inderjit (known as 'Ian') joined in the late 1970s. Bill worked more or less every day in the business, whilst the Claimant helped out on practical tasks and spoke to customers in (rather than running) TTC's electronics store. That store was at 554-556 Foleshill Road - i.e. 'the Shops', which in those days was knocked through to one property. Ms Dobson described it and enclosed this picture:

"[It] comprises three, two storey properties, two of which were formerly dwellings. Number 558 is an end-terrace and 556 and 554 are mid-terrace properties. The buildings are of a traditional masonry construction."

146. Over time, Bill went on to acquire all three of the Properties, including the prestigious if dilapidated old Art Deco 'Co-Operative Emporium' at the heart of Foleshill High Street. Ms Dobson described it and enclosed this picture

"[It] is a locally-listed landmark building described as an iconic Art Deco building. It is a three-storey building of traditional masonry construction... around 1931..[by] the Co-Operative Wholesale Society."

However, the curiosity of the group was the old Ritz Cinema, further up Foleshill Road, which Ms Dobson again described and enclosed this picture:

"[It] is a three-storey, irregular building that was formerly the Ritz Cinema [and] has been described as an iconic Art Deco building. The building is of a traditional masonry construction and is faced with corrugated steel elevations with [painted] mock-dressed corner stones."

From SB's January 2006 note, the Claimant remembered it had been bought in 1986. I have not found purchase dates for the other two of the Properties.

147. The Properties were all considered 'family properties' as I have already mentioned. All of them were acquired by dint of Bill and Ian's hard-work over many years and they were both very emotionally-attached to them (as evidenced by Bill's later angry letters about the Krishans, to which I have referred). As I shall explain, this led to a dilemma for the Claimant later about dealing with them because they were so important to Bill. However, the three Properties were in Bill's name and he later transferred them to the Claimant in 2000. It is true she said in 2002 to Coventry CC that the Shops were owned by Bill, Ian 'and family' when denying responsibility for rates. That was clearly Ian's perspective, who continued to include the Properties in TTC's accounts after Bill stopped work. However, since TTC was a partnership, there is no evidence that the Properties' beneficial ownership was different than their legal ownership - in Bill's name, even if practically seen as part of TTC's 'empire'.

148. The Claimant and Bill went on to have four children: the eldest was Bobby, then Nina, Sukhjeet and finally Arun. Bobby as a youth worked in the family business but went on to University and eventually became a BBC Producer. I will touch on some of the life experiences of the younger three in a moment. However, the Claimant, as an intelligent woman, found her domestic-centred life increasingly stifling and frustrating. Indeed, later, she enrolled at Warwick University and obtained a Degree in English Literature and Cultural Studies. Over the years, the Claimant's marriage to Bill also became increasingly difficult. Bill began to suffer from serious mental health issues in the 1990s. He became abusive to the Claimant, physically and verbally. By 1999, she had decided to move out. Whilst Bobby, Nina and Sukhjeet were adults by then, Arun was still a child. The Claimant moved out with him to her parents but really wanted her own place. So, with Bobby's help, she rented a property in Shropshire, the other side of the Midlands - and told Bill she wanted a divorce.

149. However, even in 1999-2000, divorce was still a taboo subject in Bill's traditional family. Bill (who owing to his illness had effectively retired from TTC) accepted they would live apart for the moment but promised to transfer the three Properties into her name if she did not divorce him. This was the point on which the Claimant was cross-examined in 2020, as she had said in evidence in 2010 that Bill put them in her name due to the dispute with Ian. However, as the Claimant pointed out, these were linked - she mentioned both points to the Council in that conversation about rates for the Shops in 2002. If anything, the dispute with Ian in conjunction with stopping the divorce is all the more reason for Bill to want to gift the Claimant the Properties, which were no longer in use. Mr Graham makes a fair point that the Claimant has expressed herself differently about this - initially that she held them on trust for TTC, now as 'family properties'. Yet that is how she saw them, which her then-lawyers (wrongly) interpreted as 'TTC' being a beneficiary. But far from accepting Ian's claim on the Properties, she wanted to avoid Ian having any claim, as I will find Mrs Krishan knew and exploited. I return to this on resulting trust, but I find the Claimant was beneficially gifted the Properties by Bill, but despite the legal (and formal equitable) position, she informally considered that they remained 'family properties' in which Bill had a 'stake', or even that they 'really belonged' to herself and Bill. However, Bill's mental illness continued and the Claimant and Arun made a new life in Telford, but regularly seeing her other children. Bill accepted this, as he paid £180,000 for her to buy her own home in Telford outright. With that and the Properties, she was asset-rich but cash poor, studying her degree on benefits (lawfully as the DWP accepted in 2009-10).

150. However, by 2002, the Claimant was beginning to struggle financially. She certainly had no money to maintain the Properties and pay for their expenses. Presumably from a search of the Land Registry, she was contacted by Coventry City Council ('Coventry CC' or 'the Council') about the business rates for the Shops in May 2002. That led to the Coventry CC's note of its discussion with her I have mentioned. It records that the Claimant told them that whilst the Shops were 'given' to her by Bill, they were 'owned' by him and Ian (along with other property on the Foleshill Road) but she was separated from Bill. That may be the way she saw the situation (especially as it would avoid her liability) but the Council did not see the legal/equitable position that way and nor do I.

151. All the Properties had been empty for a long time and were in poor condition. In November 2002, Coventry CC's rates valuation report described the Co-Op as 'in very poor condition and requiring a substantial amount of work to bring it to a tenantable standard'. This included repairs to the roof, brickwork, guttering, stairs, walls gates to the yard, replastering of the internal walls, rewiring, installation of a fire alarm and lighting, replacement of the toilets, installation of running water and central heating, repair of the lift, pumping out of the flooded basement, external redecoration and general tidying. The report estimated the total cost of the works would be around £750,000. As it stood, the report estimated the value of the Co-Op as only £108,000. The same impression is confirmed by a later full survey of the Co-Op in 2003 by Barneveld surveyors, who estimated repair costs as £677,000 at full specification or around £400,000 'if much lower spec'. (Ms Dobson found this was a helpful report on costs).

152. By March 2003, the 'owner' of the Co-Op was described in that report as 'Mr Takhar': which I suspect was a reference to Bobby who took on management of the Properties around this time. He had actually worked in the Co-Op building when it was still TTC's shop when younger and recalled it holding a lot of stock on the upper floors. In his statement, he described the Co-Op as having been empty for 2-3 years and 'needing some work done'. He suggested Bill's contacts could do the work for £200,000. However, that may be because they were all rather in denial about the amount of work needed. Bobby clearly saw the Co-Op through rather rose-tinted spectacles as 'the Jewel in the TCC Crown' as he put it. It certainly had a faded glamour of a bygone age of Art Deco and was a well-known and prestigious building in Foleshill, but the evidence and 2005 photographs show that it was simply in very bad condition.

153. Similarly, Bobby described the Shops in his statement as 'needing some touching up'. This was another understatement. There is no contemporaneous evidence about the Shops. However, the Savills report in May 2007 noted that Number 558 had 'suffered significant structural damage evident from the severe cracking at first floor level', although they could not gain entry to the premises or even see the garden because it was so overgrown, confirmed by 2005 photographs. By then, the old TTC electronic store had been re-converted back into the three Shops, but were still seen (as Ms Dobson noted) as one 'job lot'.

154. In fairness, Bobby was rather more clear-eyed about the Cinema, which he described as 'his father's dream' not theirs and 'an outlier'. He said he would have been prepared to sell it to fund development of the Co-Op (to which I will return on remedies at the end of this judgment). Bobby said in his statement the Cinema 'had been vacant for 20 years and was in significant disrepair'. Indeed, the Claimant later commissioned a survey in December 2004 through the Shropshire Chamber of Commerce which said that it was:

"...basically in reasonable structural condition and has the potential for renovation/conversion...[but] the costs will be relatively high and...it may be more cost-effective to demolish the structure and to redevelop the site. [It is] in a fairly prime location and has the potential for either a community facility as intended or alternative uses such as mixed retail and rental."

The report estimated the immediate costs as £6,000 and some roofing work of £10,000. But the full renovation costs were assessed in 2006 as c.£600,000.

155. Whilst the Shops were certainly subject to Council Tax and Business Rates, there is no evidence the Co-Op and Cinema were, possibly owing to their condition. Coventry CC certainly wanted something done with the dilapidated and disused Cinema, under some local pressure. A March 2003 note records that three Councillors had presented a petition (and as will be seen, they did not give up). The report proposed that the Cinema be valued (why I suspect that Coventry's valuation of £160,000 if demolished came from mid-2003 not late 2002) and Coventry CC work with the owner to develop it, possibly with a grant.

156. Notably, in June 2003 to discuss this Coventry CC wrote not to the Claimant, but to Bobby (who had also been the contact for the Barneveld Report). By then, he had largely taken over from the Claimant in dealing with the Properties, but not entirely (e.g. she commissioned the December 2004 survey on the Cinema). In July 2003, Coventry CC did write to the Claimant once it confirmed she was formally the owner. However, from other documents such as a February 2004 internal email within the Council, it appears they were generally dealing with Bobby. His status came up again in mid-2005, as I will describe. However, that February 2004 email noted he had said the Properties were owned by his mother but that he was dealing with them and envisaged a 'community use open to all' rather than some faith groups or purely commercial developers.

157. As I said earlier, whilst HHJ Purle QC concluded that Bobby wanted to sell, I conclude he was prepared to sell the Cinema, but had declined offers for the Properties because he wanted to pursue a 'community use' for them. In evidence to me, Bobby explained that he had initially left management of the Properties to his father, but Bill was struggling with his mental health and whilst he kept saying he would sort out with Ian what was happening with the Properties, he never did. Bobby and his mother got tired of waiting and - I find in 2003, he decided as the eldest son, it was his responsibility to try to develop the Properties as community assets. As Bobby explained, Foleshill was a busy and close-knit Asian community with many local businesses, including TTC. One jeweller had approached Bill and Ian but they could not agree about what to do. Others approached Bobby about the Properties. However, Bobby wanted to try and get funding to develop them for community use or rental rather than sell them. This was not least because Bobby still saw Bill as having a stake in the Properties and he wanted his father's 'green light'. Bobby said he was even prepared to dip into his own savings which were at that time around £80,000, or as I noted, to sell the Cinema to fund developing the Co-Op and Shops.

158. However, in that February 2004 internal email Coventry CC officers were blunt:

"It was clear that neither he nor his mother possess the funds to develop the sites themselves and are unlikely in my view to be able to cover any future building maintenance costs or premises costs for such large sites in such poor condition. Given his desire to lease the properties this means he needs to bring in significant long-term streams of income or sell the sites on."

I suspect this was also what was meant in an internal brief from Coventry CC to its development agents Donaldsons in May 2005 by 'owner unrealistic'. Indeed, in July 2005 they concluded that Bobby's plan for a drama and literature centre at the Cinema would cost over £1 million even though its 2003 value was £160,000 on demolition. 'Unrealistic' would seem to be a fair description.

159. Another reason Bobby had taken on responsibility for dealing with the Properties from around 2003, other than his father's inertia, was his mother's other problems. The first aspect was her financial worries. In July 2002, the rates bill for the Shops was £2,044.75, which led to a Magistrates' Court summons for £2,119.75 in October 2002. This led to the involvement of the bailiffs. Whilst she managed to pay that off, by April 2003, the rates arrears were back up to £1,529. The Claimant managed to find work as a teacher on a graduate training scheme at a high school in Wolverhampton in 2003 and her net salary was c.£12,000. Doubtless this helped a little, but it was not enough to cover her mounting costs. The Claimant approached Bill, but he told her to speak to Ian, but when she did, he simply told her to speak to Bill again. She became desperate. Indeed, in December 2003, she finally decided to tell Bobby how bad things were financially and he paid off a bailiff demand of £1,539.

160. However, the Claimant's problems were only really beginning in 2003. Her second oldest son Sukhjeet was at university and began experiencing mental health problems. The Claimant called Bobby and they went to Kent to pick Sukhjeet up, but he did not really recover until 2006-2007. So, during the critical period in this case, she was caring for him, as well as for Arun. Indeed, I accept all this stress began to take its toll on the Claimant as well. She has not disclosed her medical notes from the period, but there is a 2009 GP letter which says:

"As the medical practitioner involved in [her] care...I can confirm that during the period of late 2003 to 2005, she was suffering significant stress in relation to a family member. This was her son Sukhjeet, who I saw at the end of 2003, suffering from psychosis..."

There was rather a debate about whether the Claimant was 'clinically depressed' and 'like a zombie'. That may have been a little bit of melodrama by the Claimant and there is no medical evidence confirming clinical depression. However, I entirely accept that for those reasons and her financial worries, she was under 'significant stress' and this had a huge impact on her resilience.

161. Moreover, things then got even worse for the Claimant. She was briefly signed off sick from work in March 2004 for minor physical conditions, which would not have helped. Meanwhile, her debts were building up. These included her substantial credit card debts, which at one stage were £5,500 on her RBS card, £3,800 on her Barclaycard and £550 on her Natwest card. Moreover, in 2004, her other child Nina was getting married and the Claimant felt the responsibility to pay for the wedding. She got into further debt to the sum of £22,000, which ended up in a County Court Judgment in 2006 that Bobby paid in 2008. To make matters worse, a week before the wedding in 2004, she and Arun were in a car crash. She sustained soft tissue injuries to her shoulder and hip and whilst she attended the wedding, she eventually gave up work and went onto benefits. But I suspect that was more the mounting stress than her own injuries, as Arun was injured and started having headaches, as also confirmed by the 2009 GP letter:

"At the time, she was also experiencing difficulties with her younger son, Arun, for severe headaches and he was requiring cranial osteopathy...."

By late 2004, she had a Legal Aid bill of £4,124, bailiffs were chasing Council Tax bills of £1,732.91 and there were further bills for the Shops for £4,192.

162. Whilst I am conscious that the Claimant is over-dramatic and has a distorted or poor memory at times, it is fair to describe all these problems coming together in the course of 2004 as a 'perfect storm'. The financial pressures were made worse by Nina's marriage, in turn made worse by caring for Sukhjeet's mental health problems, in turn made worse by a car accident causing significant injuries to Arun; eventually leading to her giving up work (although that happened later), in turn making her financial problems even worse still. I therefore accept that even before she gave up work, as the Claimant put it in her statement:

"[M]y life was slowly unravelling from 2000 onwards. By 2004, my marriage had fallen apart in all but name. I was in debt, but didn't really want to ask my eldest son for help. My two younger sons were both ill and required constant care. My daughter had gotten married to someone whom I thought would be bad for her and which ultimately ended up in divorce...."

163. It was under this mounting pressure that in mid-2004, the Claimant remembered her cousin Parkash and reached out to her by calling her to invite her to Nina's wedding. I do not accept this was some sort of devious plan to get the Krishans to give her financial support. I accept that in mid-2004, the Claimant felt she needed emotional support and thought of her cousin with whom she had once been so close. She was no longer with Bill and so got in touch with Mrs Krishan to invite her to Nina's wedding. They did not attend it because they never received the actual invitation - it seems that the Claimant got Mrs Krishan's address wrong. This suggests the Claimant is right in her recollection that she called Mrs Krishan and was invited round to the right address rather than turning up out of the blue to an address she had got wrong, as Mrs Krishan suggested. Either way, they both reconnected and the Claimant became a regular visitor, not always invited but always made welcome, as one would expect from reacquainted cousins. They initially reminisced about childhood, but eventually the Claimant felt comfortable enough to confide her problems in her cousin and at this stage, in fairness to Mrs Krishan, it sounds like she gave a lot of emotional support and in turn rightly gained the Claimant's trust, as the latter put it in her statement:

"[A] we grew closer and closer, I started to confide in Parkash about my personal problems. I told her about my struggles with Bill, my worries about my children (particularly Arun), my health issues and my money problems. I felt really comfortable sharing these things with her. I had never shared so much with anyone before and it felt really good opening up about these very private aspects of my life."

Given what follows, it is important to acknowledge that at this point, I accept Mrs Krishan was motivated only by family-feeling for her rediscovered cousin. She was not 'grooming' the Claimant, but nor was she being 'groomed' by her. The Claimant was simply opening up to her about her deepest worries and concerns. However, I also accept that during 2004, the question of the Properties did not really come up between Mrs Krishan and the Claimant. As I have discussed, the Claimant had an awful lot on her plate besides the Properties, which by this stage, she was mainly leaving to Bobby. However, as I noted, the Claimant did arrange the survey on the cinema herself in December 2004, which as I quoted, suggested it had development potential but needed a lot of work.

164. Given that, it was inevitable that in early 2005 the Claimant would mention the Properties at some point to her re-found confidante, Mrs Krishan. I accept the Claimant's recollection that what prompted her to mention it was Mrs Krishan asking her about divorce. The Claimant explained she had not got divorced from Bill, but he had transferred her the Properties. Mrs Krishan said it was unfair she had been lumbered with them as they were probably mortgaged to the hilt (doubtless thinking of her financial problems which they had often discussed). However, when the Claimant told Mrs Krishan the Properties were not mortgaged, I find that Mrs Krishan realised these Properties could be valuable. Mrs Krishan claimed the Claimant first told her the Properties were derelict, so she could not sell them and even if she could, it would not pay off her debts. However, given the Claimant and Bobby's rose-tinted view of them - and indeed the then-recent survey suggesting the Cinema had development potential - I find the Claimant probably told her about their development potential. Doubtless, Mrs Krishan then mentioned this to her husband, who was undertaking his own health centre development in Wolverhampton at the time. I find like most successful business-people, he was always on the lookout for a development opportunity.

165. I also accept the Claimant's perspective that this first conversation in early 2005 about the Properties being mortgage-free and capable of development was a turning point in their relationship. I accept Mrs Krishan started talking about money a lot more and how experienced they were in property development. As noted, the Claimant's statement stated 'I can recall this shift in the tenor and nature of our conversations quite distinctly, because it was a marked change', which Mr Graham suggests is obviously in the Claimant's lawyers' language, not hers. I accept that, but it does not mean the Claimant did not notice a change in tone from Mrs Krishan. I accept that she did - as she went on to say in simpler language: 'we had never really talked about her wealth much before'. I find that it was Mrs Krishan, doubtless encouraged by Dr Krishan, who was angling to help with the Properties, not the Claimant angling for help with the Properties. Indeed, I find the Claimant repeatedly declined it, since she did not want to 'burden' the Krishans with it and she trusted her son Bobby to deal with them.

166. However, by early 2005, Coventry CC were starting to lose patience with Bobby and his unrealistic plans for the Properties. On 8^th February 2005, faced with ongoing councillor pressure about the dilapidated Cinema, Cabinet agreed in principle that the compulsory purchase process could be followed 'as a last resort' for the Cinema and Co-Op (not the Shops despite the arrears) among other unrelated properties. An email a year later in March 2006 states the strategy was 'to give authority to use the CPO process, inform owners of this, then encourage progress by negotiation and this fails, to use CPO'. However, given Mr Todd and Mr Duncan's evidence and their brief to the agent Donaldson's in May 2005, this was not the formal start of the CPO process, which was a formal report to Cabinet to make a CPO - that never happened. It was simply authority to use a potential CPO process as leverage to get progress on the Properties. As it was put in a May 2005 brief, the plan was for the Council to take preliminary steps for CPO in August 2005, recruit a developer by November 2005, complete negotiations by April 2006 and 'start the CPO process, if necessary' in May 2006. Even if that were to happen, as I explained, the owner could appeal it to the Secretary of State and was compensated at full market value, subject to outstanding Council debts.

167. It was in that context that Coventry CC briefed Donaldsons in May 2005 that the value of the Co-Op was £108,000 (that was from 2002), but there was a full structural survey (by Barneveld in 2003) and it was located in a district centre - and 'retail, community, offices or residential were all possible' but 'the owner was unrealistic'. Whilst the owner was named as Mrs Takhar, her representative had been Bobby and it was his plans being described as 'unrealistic', although the plans for a drama and literature centre at either the Co-Op or the Cinema doubtless were endorsed by his mother with her degree in English Literature. The Cinema was described as valued at £160,000 assuming demolition (as I said, probably from early 2003). It noted that the owner had refused a structural survey, but in fairness this may be because the Claimant had a structural survey in December 2004 as I said. However, again the brief stated: 'owner unrealistic'. Accordingly, Donaldsons took the steer from their client, the Council. In their report circulated to the Claimant in July 2005, Donaldsons noted and fully costed the Takhar family's plans for a drama and literature centre at either the Co-Op or the Cinema, which for the former would cost nearly £1 million and the latter over £1 million. However, Donaldsons also 'appraised more commercially viable alternative use'. They described the Co-Op as 'derelict with substantial refurbishment required', which even on a commercial mixed retail/residential basis would be £867,000. They proposed demolition and a residential development for the Cinema, not least as the proposal for a community project may be hampered by the lack of parking.

168. Whilst the Donaldsons report was not sent to the Claimant until 12^th July 2005, Donaldsons had plainly reached their view prior to a crucial meeting between Coventry CC officials including Mr Duncan and Bobby Takhar on 30^th June about the Co-Op and the Cinema (again, the Shops were not mentioned). The notes of the meeting record the Takhar family had requested a meeting as they were considering commercial offers from developers (I find of the kind Bobby described from local businesses) but preferred them to have a community use. It was noted that Donaldsons felt whilst the Cinema if demolished for housing 'would offer a commercially attractive proposition to a developer, the same could not be said of the Co-Op' and recommended the two were treated as one project. The meeting noted the Co-Op was valued at £100,000 (strictly, £108,000 in 2002 as there was no updated valuation) and needed £900,000 of work - £700,000 structural and £200,000 refitting. Bobby said his own costing from (a contractor of) McAlpine was £200,000, but as I said, that was an unduly optimistic estimate. Mr Duncan said that grant funding was unlikely through the Council. But, more positively, another official suggested it may be available for the Co-Op to be converted into a local health centre that Foleshill needed as 'there had been a long and fruitless search' for one as with other parts of Coventry and an official from the Primary Care Trust said it could be investigated. The notes continued:

"Andy Duncan said that he would be seeking authority from the City Council's Cabinet during September to appoint Donaldsons as a consultant. At the same time he would start the process leading to compulsory purchase powers being made available to the Council. He stressed that it was nobody's interests that these powers were actually used other than as an absolute last resort and a mutually agreed solution was in everyone's interests. Once appointed, assuming this is agreed, Donaldsons will contact the family to explore their objectives and interests." (my underline).

169. I make five comments about the notes, including the 'action points' that followed:

169.1 Firstly, Mr Duncan did 'put CPOs on the table' but also strongly stressed they were an 'absolute last resort'. As I have said, this was neither the announcing of compulsory purchase orders themselves, but rather the 'start of the process' - a long process as he knew and as I have explained. Moreover, Mr Duncan did not even say CPOs were 'likely': on the contrary, he actually went out of his way to stress to Bobby Takhar that it was 'in no-one's interests that the powers were actually used' and 'a mutually agreed solution was in everyone's interests'. Indeed, the 'start of the process' was not even one of the action points at the end of the meeting. However, it does not seem to have been mentioned that a CPO would in any event mean compensation at full market value, less outstanding debts to the Council etc.

169.2 Secondly, in those circumstances, I do not accept that Bobby Takhar 'did not pick up on CPOs being mentioned' as he told HHJ Purle QC and myself, which is simply unrealistic given the contemporary notes. As I said, the process of saying that in 2009-10 has become his memory - the 'retrieval' in the Original Proceedings and Bobby's 'litigation mindset' throughout has distorted the memory 'stored' as Leggatt J described in Gestmin and Popplewell LJ in his lecture. In short, Bobby has effectively convinced himself CPOs were not mentioned when the notes show they plainly were. However, I entirely can and do accept that Bobby was not unduly worried by the risk of CPOs, given Mr Duncan's reassurances about it. However, Bobby was conscious that he was his mother's representative (as I discuss in a moment) and I find on the balance of probabilities after the meeting he would have told her about the eventual possibility of CPOs being made as an 'absolute last resort' as Mr Duncan put it. I also accept that neither Bobby nor the Claimant knew that if CPOs were eventually made, full market value less debts etc would be paid, as that had not been mentioned.

169.3 Thirdly, it is clear that Bobby saw himself as his mother's representative because, importantly, one of the action points states that his task was to:

"Obtain a solicitor's letter granting him Power of Attorney to negotiate on behalf of his mother, the registered legal owner, and forward this to Andy Duncan by September."

In evidence, Bobby explained this did not mean a formal Power of Attorney, just a solicitor's letter confirming that he had the Claimant's authority to act on her behalf, as he had informally been doing and it was her idea. This demonstrates that they were both fully intending for Bobby to carry this on.

169.4 Fourthly, Bobby's plans for a community use were not finished. One action point was for a Council official to consider local planning documents to see whether the Cinema could have a community use (albeit perhaps not as the rather Quixotic dream of a 'drama and literature centre' for Foleshill). As the last line of the quote shows, plans included the family's objectives.

169.5 Finally, the meeting had raised an entirely new and possible 'community use' - indeed one which may have unlocked public funding - namely using the Co-Op as the badly-needed health centre for Foleshill. Something that would benefit the whole community, as Bobby and the Claimant had always wanted. As it happened, that was also Dr Krishan's own expertise.

170. So, before moving on to what happened next, it is convenient to consider and comment on Mr Graham's submissions of the Claimant's position in mid-2005, which I can roll together in three points flowing from my findings above.

170.1 I agree that she was struggling to pay her debts as they fell due (and indeed would end up with a County Court Judgement on the wedding debt of £22,000, although the Krishans were not aware of that until after the transfers in late 2006). I accept that in principle, those debts could have led to bankruptcy proceedings. She was 'asset rich' (owning not only the Properties but her own mortgage-free home worth £180,000 as she later told Mr Whiston) but she was 'cash poor'. However, bankruptcy for the Claimant was only a theoretical possibility, since she could in fact sell or mortgage one of her assets - especially the Cinema as Bobby actually contemplated - or even just pay off her debts of c.£30,000 from his savings of £80,000, as he did in 2008 with the CCJ. Bluntly, I find it simply would never have come to her being made bankrupt and debates about bankruptcy net estate and whether she would have disavowed the Properties are academic.

170.2 However, I accept that Bobby's savings were not enough to fund any refurbishment, obviously the Claimant could not; and Bill and Ian would or could not help. Coventry CC would also not provide a grant. Yet the PCT might do so for the new 'health centre' idea, which I accept would have been just the sort of 'community project' the Claimant and Bobby would have welcomed if that were possible. Moreover, I accept they would have been prepared to sell the Cinema if necessary to keep and develop the Co-Op (and the Shops). Therefore, whilst their 'Plan A' of a drama and literature centre was unrealistic, there was clearly a 'Plan B' including selling the Cinema, before getting to the 'Plan C' of selling the Co-Op and the Shops too.

170.3 Whilst of course the Properties would have been lost had Coventry CC obtained and implemented CPOs, that would have been a long and drawn-out process, which under their own timetable (that they were following) would not even have formally started with a Cabinet report until May 2006. I will find at paragraph 569 below but for the Krishans' intervention, the Takhars would have accepted reality and sold the Cinema in or about April 2006 to remove the Council's main concern. In any event, had CPOs ever been made, the Claimant would have got full market value for any of the Properties taken by CPO, subject to her relatively modest debts which Bobby could have paid.

After all, in fairness, this is one of the reasons for the Claimant's anger in her evidence - in part at herself - as actually in hindsight, her financial situation was easily resolved. She was indeed 'cash poor' - but Bobby was not, if she had got over her pride about asking him - and she was certainly 'asset-rich'. Indeed, as Mr Matthews said in evidence, there were options with these viable Properties, even if (as I would add) it would have required rather more realism from the Claimant and Bobby than they had shown in 2003-05. It was that sort of realism that Coventry CC's plan was intended to achieve - not the rush to compulsorily purchase the Properties, which as Mr Duncan said at the meeting on 30^th June, would have been 'in nobody's interests' - including the Council's.

Assessment of the Evidence: July to November 2005

171. Yet within five days of Bobby's meeting, on 4^th July 2005 the Claimant had signed a letter authorising not him to deal with the Properties on her behalf with the Council, but Dr Krishan. But it took until 20^th November 2005 for Gracefield to be incorporated. What happened over this four-month period is critical, yet none of the discussions the Claimant and the Krishans say occurred are recorded. Moreover, they give irreconcilable accounts. The Krishans say that transferring the Properties to Gracefield was the Claimant's idea because of her financial desperation, as a joint venture company to renovate the Properties then sell them, dividing the profits equally after the Claimant first had £300,000 - the market value at the time of the transfers in March/April 2006. The Claimant says that in this period the Krishans told her the Properties were subject to CPOs (or at the least 'likely' to be), that they were 'worthless' or only worth £100,000 because of the CPOs, that if the CPOs were removed they would be worth £300,000 (instead of their real value of almost three times that); that if the Properties were transferred into Gracefield's name, they would be renovated and let (not sold) and managed for her benefit but would still belong to her; and this was an 'act of charity'. The Claimant now contends that all of these were fraudulent, misrepresentations. As I explained by reference to Three Rivers and Jafari-Fine, the inference of fraud must be assessed on all my findings of primary fact and so I will determine that later in my conclusions on undue influence. But I can now decide on the balance of probabilities who said what to whom and whether or not it was factually true. Yet while not quite the totally-undocumented pub conversation in Blue, this period was very far from the document-heavy dealings in Gestmin. So, as I said when assessing the evidence of the parties, given the importance of this four-month period, before making findings of fact about it (and indeed on to the more-documented period from December 2005 to April 2006), I find it helpful to assess all the evidence on it: a few contemporary documents and the evidence of the parties (and Bobby).

172. I start with the incontrovertible evidence and contemporaneous documents:

172.1 Firstly, there is a note of a booking which appears to have been printed off on 2^nd July 2005 for flights for two adults. It is cut off on the right-hand side but seems to be flights from London to Delhi in July 2005, returning in August, although neither party mentioned that. I also note Mrs Krishan's diary for 2^nd July (I do not have it for 4^th July) noted 'Bero came' (Mrs Krishan's name for the Claimant).

172.2 Secondly, the wording of the 4^th July 2005 letter was as follows:

"Dear Sir/Madam,

Re: Former Co-Op Emporium...and Ritz Cinema

Following your meeting last week with my son on the 30^th June I write to formally advise you that I am currently in negotiations to develop the above sites and would be grateful if we could arrange a meeting to sort the matter out. I have authorised Dr Krishan to contact you on [my ?] behalf to arrange a mutually convenient time for this meeting as soon as possible.

Yours Sincerely [her signature] B.K. Takhar (MRS). "

This is the start of the Krishans' involvement with the Properties

172.3 Thirdly, photographs show Mrs Krishan wrote cheques for £5,000.15 (£3,881.15 for the Barclaycard bill and £1,119 to top up) on 22^nd July 2005: over two weeks after the Claimant's letter of authorisation for Dr Krishan. Indeed, the cheques also came after the sending at Mr Duncan's request of the Donaldson's report to Bobby and Dr Krishan - on 12^th July, that the Krishans could have read before 22^nd July.

172.4 Fourthly, about a fortnight after Mrs Krishan wrote the Claimant the cheques on 5^th August 2005, Dr Krishan wrote to Coventry Primary Care Trust referring to a conversation that day and setting out his own experience of health centre development asking about public funding for a health centre on the Co-Op site (the meeting on 30^th June).

172.5 Fifthly, in August-September 2005, Coventry CC wrote to the Claimant chasing Council Tax on the Shops for 2001/02, 2002/03, 2003/04, 2004/05 and 2005/06 with a total balance in a 'Final Notice' of 13^th September of £2,135.27. However, on 30^th September, £250 was paid on the Claimant's Council Tax account and again on 14^th October (albeit not noted in a 2014 letter). Yet the 'Original Balber Takhar Account' in 2008 records the Krishans first paid in November.

172.6 Sixthly, on 17^th October 2005, a Coventry CC Cabinet report faced with more Councillor petitions about the 'eyesore' Cinema proposed 'investigating' notices under s.215 Town and Country Planning Act 1990 ('s.215 notices'). These are not the same as compulsory purchase orders ('CPOs'): they require repair works or demolition.

172.7 Seventhly, on 28^th October 2005, Donaldsons wrote to Dr Krishan to suggest a meeting with them and the Council about the Cinema and the Ritz (consistent with the timescale in the Council's brief back in May 2005), which from a letter of 1^st November seems to have been organised for 16^th November. There is no note of that meeting, but neither is there any letter suggesting it was moved. However, Donaldsons also refers to an earlier conversation with Dr Krishan. On 5^th November, someone took external photos of the Properties.

172.8 Eighthly, on 15^th November 2005, a fax from one of SB's colleagues ('SR') instructed the incorporation of a new company - i.e. Gracefield - on Dr Krishan's instructions. SR also emailed him and he on 16^th November 2005 confirmed the details and shareholdings in it as 50% for the Claimant, 25% for himself and 25% for Mrs Krishan.

172.9 Ninthly, on 16^th November - the same date as Dr Krishan's Council meeting - there is a handwritten note by or on behalf of John Davies:

"JD, Dr K, Mrs K, Mrs Takhar relative. Mrs Balber Takhar not seen for 33 years. Needing help with bankruptcy and eviction. Properties in Coventry - CPOs losing them. Has no family or no help - CCJs, no family support, violent marriage, divorce. Demanding help handed deeds and was very insistent. Verbal discussion agreed with 50/50 share and further written agreement sorted. Deal was in her favour as Dr K to do finance. Need an architect. JD to be contacted. Jean to remind JD."

It is not clear from the note who gave Mr Davies that account.

172.10 On 18^th November, SR emailed SB plainly a note of a conversation with Dr Krishan. His plan was for the Co-Op (oddly called the County Court) for 3 units on the ground and flats on the upper floor to be rented or sold; and the Cinema to be demolished and a block of flats to be built and rented or sold. Nothing was said about the Shops. It added that the Claimant had outstanding debts 'so Dr K will be paying them off and this will be his way of buying into the properties'.

173. The most contentious document is Mr Davies' note. It is not suggested this has been concocted and I find it is a contemporary note of a real meeting on 16^th November 2005. However, the Claimant denies being present. Yet, if she was not there, her personal circumstances would not have been discussed in such detail if Dr Krishan was just asking Mr Davies to recommend an architect. In fact, the listing of names suggests the Krishans and the Claimant were all there. Mrs Krishan says the Claimant told Mr Davies what she had told them. However, I do not accept she would have said she was 'demanding help and very insistent' and had 'no family support' given Bobby, or mentioned 'divorce' when still married to Bill. Indeed, Dr Krishan's statement does not mention the Claimant even being there and neither of the Krishans mentioned that in their 2009-10 evidence. They told me they did not want to involve Mr Davies in 2010 as he was dying. But they could have mentioned the meeting but explained that. Therefore, all the parties' evidence on this meeting is unreliable and I have found Mrs Davies' hearsay evidence unreliable too. Conscious of Chen, TUI and Rea, whilst the note was put to all parties and their evidence was challenged, the 'cases being put' to each of them are wrong. I therefore do not make findings about exactly what was said and by who to Mr Davies at that meeting. However, as I find that it is a genuine note of a meeting I find they all attended, I can take it into account, in weighing the parties' wider evidence on July-November 2005.

174. On that approach, whoever was doing the talking and whatever precisely was said, Mr Davies was told either by or in front of the Claimant that she was 'needing help with bankruptcy and eviction. Properties in Coventry - CPOs losing them'. The Krishans say that is what the Claimant had been telling them. However, by November 2005 Dr Krishan had been dealing with the Council for four months and I find on the balance of probabilities would have known that the Council still saw CPOs as a 'last resort' and even if made, paid full market value less Council debts. It is difficult to understand why Dr Krishan would have let the Claimant repeat (or repeated himself) things he must have known by November were wrong like 'CPOs losing them'. Therefore, the note is more consistent with Mr Davies being told what the Claimant says the Krishans had been telling her for the previous four months - 'CPOs losing them' i.e. the Properties would be lost to CPOs, (not 'CPOs mentioned', or 'threatened', or even 'likely') and bankruptcy and eviction. This also fits more Dr Krishan talking - consistent with his statement he met Mr Davies. Even the reference to '50/50 share with further written agreement sorted' is ambivalent, as a day earlier Gracefield was incorporated and the Claimant had 50% of the shares and the Krishans 25% each. It is unclear what the 'further written agreement sorted' was - to rent the Properties and split that 50/50 as the Claimant says, or to rent or sell them to split 50/50 that as the Krishans say. Whilst that is clear in SR's note of what Dr Krishan told her days later, it is not clear in Mr Davies' note.

175. I turn to the parties' accounts. The gist of Mrs Krishan's 2009-10 statement was the Claimant started pressuring her and Dr Krishan to help her with the Properties in early 2005, that increased after Bobby's meeting with the Council on 30^th June 2005, after which the Claimant visited and telephoned several times a week saying if the Properties were compulsorily purchased she would only receive £100,000 but she thought they were worth £300,000 on the open market. While the Krishans initially refused to help because of their own development in Wolverhampton, they eventually agreed in principle to develop the Properties and if sold over £300,000, to split the profit 50/50 and Mrs Krishan then wrote the cheques. There was no reference to 2^nd July 2005, despite the diary entry, nor to 4^th July despite the letter, nor to any meeting with Mr Davies (only his recommendation of Mr Johnson). But Mrs Krishan's account in evidence in 2010 specifically focussed in on 2^nd July 2005:

"[I]n fact, on July 2^nd - I will never forget that because we sat down and that 50-50 agreement [sic] and how it would help her. She was adamant we had to try and do something and in fact she sat on the computer and a letter was written and she wanted my husband to actually sort things out...."

176. However, it appears that Mrs Krishan did forget again about the 2^nd July 2005 after all. In her 2022 statement, unless I have missed it, there does not appear to be any reference to it, despite the diary entry. Instead, her account in her 2022 statement was essentially that after the Claimant pressing for financial help, 'in the end' Mrs Krishan gave in and paid cheques to the Claimant and agreed to pay her £400 a month cash to 'help her get back on her feet'. The statement only then goes on to say the Claimant asked for help with the Properties, which she told them were 'derelict' so she could not sell them and they would not pay off her debts anyway. The Claimant said to Dr Krishan 'Oh brother, you must help me' and suggested they could make the Properties viable, sell them and go 50/50 on the profits and that the Properties should be transferred to a company as she was worried about benefit fraud. Mrs Krishan's statement suggests that they 'eventually' said they would help and they then had a meeting with John Davies. Therefore, this account is different again: it put the money before 'help' with Properties not afterwards, it did not mention Bobby's meeting or the importance of 2^nd July, but did mention the Davies meeting not mentioned in 2009-10.

177. Unsurprisingly, Mr Halkerston cross-examined Mrs Krishan in detail about these inconsistencies and put to her the alleged fraudulent misrepresentations. She went back to her account that the key discussion was on 2^nd July 2005. The Claimant had been in quite a state, broke down and said she felt there was a real chance she might lose the Properties. It was the Claimant who had mentioned the CPOs and that the Properties were 'worthless' as a result and Mrs Krishan herself only later found out they were actually worth £300,000 and the extent of the debts (she did not know about the £22,000 wedding debt at the time). When referred to the 2008 covert recordings, Mrs Krishan insisted she herself was only repeating back to the Claimant what he latter had said herself back in 2005. Mrs Krishan said it was on 2^nd July 2005 that she wrote the cheques for the Claimant's debts and agreed to help. She said the Claimant not her had drafted the letter on 4^th July. She insisted it was the Claimant's idea to transfer the Properties to a company to be refurbished, sold and the profits split 50/50 and she kept pressing them to progress it, but the Krishans were dragging their feet.

178. However, there are a number of serious problems with Mrs Krishan's account:

176.1Firstly, it is inconsistent with her 2022 witness statement which suggests financial help was provided first, then 'eventually' help with the Properties. In cross-examination, Mrs Krishan said it was the same time.

176.2 Secondly, whilst that was more similar to her evidence in 2010, there are still real differences. For example, Mrs Krishan did not say the Claimant drafted a letter there and then - as it was dated 4^th not 2^nd July.

176.3 Thirdly, in that way and others, Mrs Krishan's latest account (her fourth) is inconsistent with contemporary documents - not just the 4^th July letter (which is more consistent with drafting by Mrs Krishan as I said at paragraph 99.3 above), but clearly the cheques dated 22^nd July.

176.4 Fourthly, this account is inconsistent with the 2008 covert recordings, where for example Mrs Krishan herself seems to be saying that by the time the Claimant paid her debts the Properties would be 'worthless' and she could be 'bankrupt', rather than saying the Claimant said that back in 2005.

176.5 Finally, this new account does not explain the delay between July and November 2005. Mrs Krishan previously said it took a while for the Claimant to persuade them to help. Her current account appears to be that they agreed to help in early July - whether 2^nd or 4^th - but then dragged their feet until November 2005. However, Dr Krishan had written to the NHS in August 2005 and was in discussions with Donaldsons by October 2005.

For all these reasons, even aside from the finding of fraud in the Gasztowicz Judgment (on which I remind myself that just because they lied in evidence before, it does not mean they are now), Mrs Krishan's evidence is unreliable. Indeed, it has gone through four different versions, changing at each stage.

179. Dr Krishan's accounts were different yet again - from Mrs Krishan's and his own:

179.1 In his 2009 statement, Dr Krishan said the key meeting was 2^nd July - the Claimant was 'desperate' as the Council was threatening to compulsorily purchase the Co-Op and Cinema and asked for the Krishans to develop them along with her. It was the Claimant who proposed a company and a 50/50 profit share, which they agreed would be split after the Claimant received the value of the Properties. He said they agreed the values of £100,000 for the Co-Op as it was valued at £108,000 in 2002 but deteriorated due to water ingress; and £100,000 each for the Cinema and the Shops. Then the Claimant wrote to the Council on their computer on 4^th July 2005. In his evidence in 2010, Dr Krishan added the Claimant was already aware of the risk of CPOs from the Council and whilst he was not familiar with it, he did tell her she could lose the Properties through the process.

179.2 However, in Dr Krishan's 2022 statement, like Mrs Krishan, he did not mention 2^nd July at all. He said the Claimant first mentioned the Properties in May 2005 as the Council were pressuring her as they were 'derelict' and 'she had no money to spend on them and was at risk of losing them'. He said he did not approve of helping the Claimant but later, Mrs Krishan helped with the credit card bills and that following settlement of that, under lots of pressure to help from the Claimant, they decided to help her. As I have said, he did not mention the Claimant meeting Mr Davies.

179.3 Understandably again, Mr Halkerston cross-examined Dr Krishan in detail and put to him the alleged fraudulent misrepresentations. Dr Krishan maintained that it had been the Claimant who approached and pressured them to help, not the other way around. However, he thought her debts were more like £15,000 - she did not mention the £22,000 wedding debt. She had said the bailiffs were after her and she could be homeless. Importantly, Dr Krishan said they discussed her selling the Properties, but she was adamant that she did not want to sell them. However, she was worried about CPOs and he did not need to make threats about that. He also knew this would entitle her to full market value if it happened, but he never discussed that with her - he said it never came up. Dr Krishan said it had been the Claimant's idea to transfer the Properties because she was worried about benefits and wanted to get the Council 'off her back' in relation to Council Tax and 's.215 notices' to do works on the Cinema (different from CPOs). But he accepted he did not say she did so due to CPOs and he said 'it had not occurred to him to mention it', even though CPOs 'had put the fear of God into Bobby'. The Claimant suggested a company and he agreed to that.

180. There are also a number of serious problems with Dr Krishan's account:

180.1Firstly, again the meeting on 2^nd July 2005 comes and goes through Dr Krishan's accounts. Moreover, his account Mrs Krishan's help with finances came first is inconsistent with the cheques dated 22^nd July.

180.2 Secondly, Dr Krishan accepted the Claimant 'was adamant she did not want to sell', yet he told SR in November the plan was to 'rent or sell'. That is inconsistent with his evidence it was the Claimant's idea.

180.3 Thirdly, Dr Krishan's case that he took a lot of persuasion is inconsistent with his letter (which he failed to mention) as early as 5^th August to the NHS to enquire about PCT funding and describing his own experience in health centre development. He was plainly very keen on this idea. By then, he also would have seen Donaldsons' report sent to him on 12^th July 2005 and could see that the Cinema in particular was a commercially-attractive site.

180.4 Fourthly, Dr Krishan's awareness of the health centre idea and insistence that Bobby was scared due to the CPOs suggests Dr Krishan was well-aware of the meeting on 30^th June. By four months later, I find Dr Krishan knew full well that for the Council, CPOs were still a 'last resort', yet Mr Davies was told 'CPOs losing them', which is not consistent with that position. Even if the Claimant said it, why did not Dr Krishan correct it ?

180.4 Fifthly, whilst Dr Krishan said in 2010 he told the Claimant she could lose her Properties to CPOs but was unfamiliar with the process, he said neither to me. He readily accepted he was aware that the owner of property compulsorily purchased is paid full market value (he says £300,000 but did not get valuations) less debts to the Council (he thought her total debts were c.£15,000). Dr Krishan accepted the Properties were not 'worthless' or even only worth £100,000. Yet he accepted never explaining how CPO payment worked to the Claimant when she he says she said they were 'worthless'.

Again, like Mrs Krishan, I find Dr Krishan's account of this period is unreliable, even aside from the finding of fraud (and give myself the same Lucas direction).

181. Of course, the Claimant's reliability is also weakened by her forgetting about that Davies meeting. But as I said, the Krishans did not mention it at all in 2009 or 2010 and Dr Krishan did not mention her being present in his 2022 statement, so this point only goes so far. Moreover, unlike the Krishans, the Claimant's account of this time has remained broadly consistent in her statements and evidence (why she was not really cross-examined much on 'internal' inconsistency with them). She said she accepted Mrs Krishan's help with the money first and then accepted her persistent offer to help with the Properties (which I accept is also inconsistent with the dates of the 4^th July letter and 22^nd July cheques). She insisted Mrs Krishan persuaded her to let Dr Krishan help and drafted the letter on 4^th July 2005. She said that after he started speaking to the Council, they met and the Krishans told her that CPOs had been applied against the Properties by the Council, which could be taken off her, leaving her with only liabilities, she could be left 'bankrupt', 'penniless' and 'homeless' or could go to prison and that Ian could take the Properties off her which 'terrified her'. However, she said the Krishans said they wanted to help as it was 'payback time' for the help she had given Mrs Krishan in childhood. They said they had experience with development and CPOs and that she should trust them with the Properties. She said she resisted their help for some time because she wanted to stand on her own two feet. However, over the autumn of 2005, the Krishans supported her and took her on holiday to Spain. They suggested they would fight the CPOs with lawyers, get the Properties up and running and rented out; and whilst they would be put in a company for administrative reasons, this was only a formality as they would still belong to her. The Claimant said she eventually gave in to the Krishans' persistent suggestions (I quote from her 2022 statement below). In short, her account has always been they used what I am again calling as shorthand both 'stick' and 'carrot' combined in further shorthand 'the rescue narrative'.

182. As I have said, during the difficult first 1½ days of cross-examination before me, the Claimant was emotional, histrionic and dismissive of questions. But she did answer some of the questions clearly, especially on this key topic. At one point she even said she was 'remembering detail as they were going through it' (but I am cautious of that). She said she planned to authorise Bobby to deal with the Properties, but Mrs Krishan said the Claimant should not be burdening him with them and they should deal with it for her. She said Mrs Krishan typed the letter of authorisation for Dr Krishan for her to sign. The Claimant said they got her to sign that letter and once they had done that, the other times they put a letter in front of her to sign, it was easier. As she had in her 2009 statement and 2010 evidence, she described how the Krishans told her CPOs had been made. They said the Properties were 'worthless' (only worth £100,000 and not enough to cover her debts, including the mounting arrears in rates and Council Tax). They said she risked bankruptcy, legal proceedings and even prison. They also kept on about her ending up bankrupt and homeless. She added when she and Mrs Krishan returned from Spain, the Krishans met Bill who handed over some keys. The Claimant said eventually she gave in and agreed. She said once she accepted financial support, first the cheques and then the monthly maintenance, she got used to it and whilst she initially she insisted she could have managed without it, in re-examination she admitted she found it useful and came to depend on it.

183. On the CPO issue, the Claimant's solicitor's letter of 24^th October 2008 (to which I return) said she had been told 'a compulsory purchase order procedure had been initiated by the Council'. It was later in November 2008 that the Council's Mr Todd confirmed the Properties were never 'threatened to become subject to a CPO' which was always a 'last resort'. Whilst it was vague in the initial letters, throughout the Claimant's evidence – her 2009 statement, 2010 oral evidence, 2022 statement and 2023 oral evidence, she has consistently insisted the Krishans said CPOs had been made. The irony is there is some contemporaneous corroboration in the note of the meeting with Mr Davies in November 2005 she denied she attended, where he noted 'Properties in Coventry - CPOs losing them' (not 'CPOs but last resort', 'CPOs threatened' or even 'CPOs likely'). As I said, I cannot find precisely what was said in that meeting and by whom. However, Mr Davies was told something like 'CPOs losing them' and I find that is consistent with what the Claimant says the Krishans told her. In her statements, the Claimant said the Krishans told her in 2005 words to the effect that 'CPOs had been applied against all the Properties' (2009 statement) or 'CPOs had been applied on the Properties' and 'the Properties were worthless and it was essential to remove the CPOs to protect their value' (2022 statement) - in other words that CPOs had been made. This is also corroborated by Mrs Krishan saying in the 19^th May 2008 recording the Properties were 'worthless' and the 30^th June 2008 one: 'When the first lot of CPO orders came' (not 'were threatened') and 'back to [being] saddled with CPOs and everything else again'.

184. Whilst the Claimant's lawyers in 2021 pleaded that the misrepresentations were in Spring 2005, she had already said it was later in her 2009 statement. As I said at paragraph 99 above, the letter of 4^th July 2005 is more consistent with being drafted by Mrs Krishan than the Claimant, just as Mr Graham pointed out similarly-complex language in her statement was not consistent with her own. Four months between July and November 2005 is also inconsistent with the Krishans' case: far from them dragging their feet (Dr Krishan was authorised on 4^th July, sent Donaldson's report 12^th July, Mrs Krishan wrote cheques on 22^nd July, Dr Krishan wrote to the PCT 5^th August etc), I find the Claimant did so. The Krishans did not pay rates arrears on the Shops in September-October 2005 (which was missed from a Council letter in 2014) - I find it was the Claimant, Bobby or Bill. She says in November the Krishans met Bill and went round the Properties (hence their photographs of 5^th November) and he handed them keys. The Krishans said in 2009 they met Bill around that time, as the Claimant saw them as 'family properties', I find that she would not have agreed to the Krishans' plan until Bill had also agreed. The last barrier to her agreement was overcome. That explains why Dr Krishan in November suddenly started to instruct all the professionals. That it is consistent with her case that until then, they pressed her.

185. As to how the Krishans 'pressed' the Claimant, her account is also supported - and theirs undermined - by what Mrs Krishan said in the 2008 recordings:

"....[B]y the time you paid everything back...everything owing to the Council, everything owing to everybody, right, I mean they were actually worthless on paper.....I know you like to think that, yes, you know, they are there, but they are actually worthless......(my underline and italics)

".... The only other alternative open to us was that they go, and that they take them off and you know, they pay some of the debts and they [you ?] are made bankrupt."

"[W]hen the first lot of CPO orders came, maybe, you know, it would have been better had we not done anything and they had just been taken off, and it would have left you absolutely nothing." (my underline)

So, Mrs Krishan was saying: (i) there had been CPOs; (ii) that if the Properties had been taken, after all the Claimant's debts, she would have been left with nothing and been made bankrupt; (iii) so the Properties were 'worthless' to her. Mrs Krishan was not saying the Claimant had told them this back in 2005.

186. Moreover, on this key point, the Claimant is also corroborated by her son Bobby, who in his statement recalled visiting the Krishans with her and them saying this:

"[T]he buildings had become a liability and if the Council was not properly dealt with, my mother would be left with huge debts and legal costs. [Dr Krishan] in particular weighed in with what appeared to be quite detailed knowledge of the CPO procedure and warned that my mother could be left bankrupt and homeless. Prison was even mentioned. The Krishans then said they had experience in fighting CPOs, having done so in relation to some land on which they were building their new Mayfield Medical Centre. They told us about how they knew inside out the tricks the Council would use... I remember how passionate Parkash in particular was, and how she said that they would not allow the Council to take away her 'children's birthright' and they would fight my mother's corner with all the experience that they had built in property development. They told my mother that it was 'payback time' for all that she had done for Parkash in her childhood."

That account is consistent both with the Claimant's account and indeed with what Mrs Krishan said in the 2008 covert recordings. Indeed, it is also consistent with Dr Krishan's own observation 'the CPOs put the fear of God into Bobby' in a way in which the Council's references to CPOs as 'an absolute last resort' would not be - I find it was the Krishans' account of the CPOs that did that. This explains why Bobby believed he 'did not pick up on the CPO issue' on 30^th June. He was saying he had not realised the CPO issue was so bad. But that is because it was not so bad: Coventry CC still saw (and always would see) CPOs as an 'last resort'.

187. In the light of all that, in my judgement the underlined content of Mr Davies' note corroborates the Claimant and Bobby's accounts of what the Krishans told them:

"16/11/05 JD, Dr K, Mrs K, Mrs Takhar relative. Mrs Balber Takhar not seen for 33 years. Needing help with bankruptcy and eviction. Properties in Coventry - CPOs losing them. Has no family or no help - CCJs, no family support, violent marriage, divorce. Demanding help handed deeds and was very insistent. Verbal discussion agreed with 50/50 share and further written agreement sorted. Deal was in her favour as Dr K was to do finance.

I do not accept this was the Claimant or the Krishan telling Mr Davies what she had said in July 2005. As I said, after four months, the Krishans must have known CPOs were a 'last resort' and such risks were far-fetched. Whilst the Claimant accepted in the covert recordings in 2008 that 'it was going to be 50/50 on everything we did', that begs the question of what they agreed to do.

188. I find the '50/50 share' mentioned in November 2005 is consistent with a 50% shareholding in Gracefield, organised that same week. The 'further written agreement to be sorted' is consistent with what the Claimant says was their agreement - for the Properties to be renovated and rented, with a 50/50 split of the proceeds (and indeed the Krishans' expenditure repaid from her share), but there is no mention in Mr Davies' note about later selling their Properties or their sale value. This is consistent with the Claimant's evidence that at least at this stage, there was no discussion in front of her of onward sale of the Properties or a profit share as such. Certainly, a profit share was not mentioned by Dr Krishan to SB's firm two days later on 18^th November when SB's colleague SR had recorded Dr Krishan telling her that he would be buying into the Properties by paying off the Claimant's debts. Moreover, as I will describe, there is also no mention of a true 'profit share' on sale of the Properties in SB's 2006 notes.

189. I remind myself that I have rejected parts of the Claimant's evidence, not least as she forgot this meeting; she lied about why she started making the covert recordings in 2008; and at least for 1½ days of her evidence was an incredibly difficult witness. I also remind myself of the important evidential principles at paragraphs 81-89 above. The burden of proof is squarely on the Claimant and it is not enough to for her to persuade me that her account is 'the most likely', as that would be her failure to discharge the burden of proof ('The Popi M'), which is to persuade me that it is more likely than not that the Krishans told her what she alleges (Re B). Since the Claimant alleges fraud and undue influence, I will decide those allegations later, on all my primary findings of fact which shed light on conduct and intentions at the time and must be clearly proved (Enal, Three Rivers, Jafari-Fini, Kekhman). However, whilst for now making findings of fact on this period, I remind myself that the conduct the Claimant alleges is inherently improbable requiring cogent evidence (Rea, Jafari-Fini, Kekhman, Privalov). In particular, I remind myself that the fact the Krishans were found to have committed fraud procuring the Purle Judgment and to have lied in their evidence in the Gasztowicz Judgment, does not mean they are now giving dishonest evidence to me - they may have lied earlier to bolster a true case they now pursue before me that there was no undue influence (Lucas, Jhutti, Slocom, Martin). Yet even bearing all that in mind, I strongly prefer the core of the Claimant's account, which I find to be true on the balance of probabilities, on three alternative bases:

189.1 Firstly, as I have just detailed at paragraphs 171-188 given paragraphs 120-136, I find the core of the Claimant's account of 2005 reliable (despite her demeanour) and corroborated; but the Krishans' accounts unreliable and inconsistent: internally with each other; and externally with documents.

189.2 Secondly, I find the core of the Claimant's account more consistent with my assessment of all the evidence at paragraphs 91-140 (summarised at para.139); and my background findings of fact at paras.141-170:

(i) The Claimant was emotionally-attached to the Properties and did not want to sell them but could not afford to develop them. Yet in July 2005, after a Council meeting where Bobby had been told that CPOs were a possibility but an 'absolute last resort' and there were (different) development possibilities for the Properties, the Claimant suddenly replaced her son with Dr Krishan, whom she had only met the previous year - the husband of her recently-reacquainted cousin.

(ii) The Properties, whilst derelict, were potentially very valuable, yet Dr Krishan did not arrange proper valuations. Outdated valuation and guesswork were used to pick £300,000. Moreover, despite the fact that CPOs were a 'last resort' for the Council, four months after Dr Krishan had started dealing regularly and would have known that Mr Davies was told 'CPOs losing them', that was inconsistent with it.

(iii) Moreover, within another four months in March/April 2006, the Claimant transferred the Properties on the basis their value subject to CPOs was only £100,000 even though it is agreed: (i) they were not subject to CPOs; and (ii) even if they were, they were not worth £100,000 but market value (at least £300,000) less Council debts.

(iv) Moreover, by the end of 2006, the Claimant was no longer a director or shareholder of Gracefield - I will find tricked by the Krishans.

(v) In early 2008, a dispute erupted when (I will find) the Claimant discovered the Krishans had put the Properties up for auction without consulting her. They then produced a number of false documents to try and persuade the Claimant to sell, which led to this litigation.

If the Krishans are to be believed, the Claimant had convinced herself (and they never corrected her) the Properties were at risk when they were not; and she would be left penniless and homeless when she would not; then also had to convince them to share in her valuable assets and a chance of huge profit in return for modest financial support (an imbalance I return to on presumed undue influence). On the evidence I have - very different than that HHJ Purle QC had - the Krishans' case is implausible. By contrast, the Claimant's case makes sense - if they were trying to take control of the Properties: as the weight of evidence from 2005-2010 shows they did.

189.3 Thirdly, I therefore find the core of the Claimant's account proved on the balance of probabilities, despite the inherent improbability of such alleged serious conduct - and even without the finding of fraud in the Gasztowicz Judgment. However, that would reduce it significantly too (Arkhangelsky).

Whilst I have focussed here on July-November 2005, given reliable documents are then more abundant up until the transfers, I turn to my findings of fact from July 2005 to April 2006, on all the evidence on the balance of probabilities.

The Krishans Take Control: July 2005 - April 2006

190. I will start my findings of fact for this period by picking up where I left off with my findings at paragraph 168-170, about Bobby Takhar's meeting on 30^th June:

190.1 It is true Bobby's dream of a community drama and literature centre was clearly 'unrealistic' and the Council did 'put CPOs on the table', but they also stressed they were an 'absolute last resort'. Accordingly, I find he did indeed 'pick up' on the CPOs, but that he was not unduly concerned by them - he still planned to get an authorisation letter from the Claimant. The Council's main problem was the Cinema, but it was commercially attractive and I find the family would have been prepared to sell it to develop the Co-Op, which now had the exciting possibility of funding to become a health centre - precisely the sort of community use the family wanted.

190.2 In the light of that, I find on the balance of probabilities that Bobby gave the Claimant that more balanced view of the meeting with the Council, she plainly knew about it, as it was referred to in the letter she signed of 4^th July. Specifically, I find he told her the Council had mentioned CPOs, but only as a 'last resort': what he had been told. Moreover, from later evidence in 2005/06, it is clear that in 2005/06, CPOs were never made and never even 'likely'. Far from it - they were and I find that they stayed a 'last resort'.

190.3 However, at the start of July 2005, the Claimant would have been worried even by that. So, I also find on the balance of probabilities, that on 2^nd July, she mentioned this reference to CPOs as a 'last resort' to Mrs Krishan, but also Bobby's meeting generally, including the plan to authorise him and for the Co-Op to be a health centre. That was too good an opportunity to miss for Dr Krishan when Mrs Krishan told him. SB later told Donaldsons (presumably on his instructions) that Dr Krishan was completing his own health centre and was interested in similar projects. Here, one had fallen right in his lap. I find that at his behest, over the next couple of days, Mrs Krishan cajoled the Claimant to authorise him to deal with the Council by pointing out his expertise, but also to save 'burdening' Bobby (not the way Bobby saw it). Worried by that, the Claimant finally agreed on 4^th July to authorise Dr Krishan to deal with Coventry CC. Mrs Krishan drafted the letter of authorisation and the Claimant signed it. However, in doing so, she was not yet fully handing over practical control of and responsibility for management to the Properties to the Krishans. That took those ongoing discussions over the space of four months from July to November 2005. Until the Krishans got involved, I find the Claimant would have continued to leave them to Bobby. Instead, in replacing her own son with him to deal with the Council, she was placing substantial trust in Dr Krishan.

191. Indeed, standing back to review all my findings so far, one can see the Claimant's trust (in the lay sense - I come to the legal issue of 'a relationship of trust and confidence' later) in the Krishans growing and developing over time:

191.1 Firstly, the origin of the Claimant's trust in the Krishans lay in her historical relationship with her cousin Parkash, to whom she had been like a 'big sister'. They had been out of contact for over 30 years due to her stifling marriage to Bill and his conservative family. However, I accept it was the Claimant's strong emotion (always crucial to her) that her beloved Parkash had come back into her life just when she needed her in a 'perfect storm' of personal and financial problems in 2004. So, the Claimant took her into her confidence with her problems to an extent she did not even do with Bobby.

191.2 Secondly, once Mrs Krishan had found out about the Properties in early 2005 and shared that with her husband, she tried to persuade the Claimant to let them manage them. However, the Claimant was still content for Bobby to do so. But after the meeting on 30^th June, she told Mrs Krishan about CPOs as a last resort; and the idea of a health centre. The Krishans wanted to be involved and Mrs Krishan used the Claimant's re-established trust and confidence in herself and the Claimant's guilt about 'burdening Bobby' with the Properties to persuade her to trust Dr Krishan to be her representative for them with Coventry CC instead of Bobby.

191.3 Thirdly, once the Claimant had been persuaded to trust Dr Krishan with dealing with the Council, I will find below that he and Mrs Krishan deliberately developed her trust in them by what I am calling their 'rescue narrative'. This was partly what I am calling the 'stick' of dire warnings about the CPOs - indeed that they had been made; and partly what I am calling the 'carrot' of financial support becoming financial dependency of the Claimant on them; with reassurance they would help - as 'payback' for her previous help for Mrs Krishan. I find Dr Krishan specifically told the Claimant to leave communication with the Council to him (as her solicitors' letter of 24^th October 2008 states, albeit I find this was before not after the transfers). In any event, whether or not told, that is what the Claimant did.

192. Shortly after the Claimant had signed that first letter of authorisation in July 2005 and the Krishans had sent it, they received a copy of the Donaldsons report sent on 12^th July 2005, which suggested the Cinema 'offered a commercially attractive proposition to a developer'. Yet whilst Donaldsons was less positive about the Co-Op, the idea of a health centre must have attracted Dr Krishan. Indeed, within a month of being authorised by the Claimant, on 5^th August, he had written to the PCT, although he said he 'was not interested in selling the building or site'. He told the PCT 'he had spoken to the planners' who had suggested it - just as it had been suggested in the meeting. I find that Dr Krishan must have either had a copy of the note of the meeting on 30^th June, or already been told the gist of it by the 'planners' at the Council, including that the process had started leading to CPO powers being made available, but as an 'absolute last resort' - just as Bobby had been told at that meeting. Indeed, CPOs would have been the obvious first question to ask the Council about. I find on the balance of probabilities Dr Krishan - and through him Mrs Krishan - knew full well CPOs were a 'last resort' and indeed the Council's position did not change.

193. Dr Krishan in his 2022 statement recalled thinking, 'there should be a corporate vehicle to protect them all', 'any borrowing would be in the company name so they would not be liable' and 'transferring the Properties into a company meant they would not all be in one name and would prevent anyone being able to walk away with them'. As I said, Dr Krishan suggested it was the Claimant's idea, because of her benefits, rates and Council Tax bills and the Council's 's.215 notices' on the Cinema - as he admitted, different from CPOs (which it 'had not occurred to him to mention', even though he said she worried about CPOs leading to 'bankruptcy' and 'homelessness'). This does not fit his description of her to Mr Rodgers as having 'no business acumen'. I find it was Dr Krishan's idea, for the reasons he gave. Indeed, the Claimant's suggested motive makes little sense. Maintenance from the Krishans might also be thought to affect her benefits. In any event, she would not have needed either if she had simply sold the Cinema - even for £160,000, let alone £200,000. It would have got the Council 'off her back', avoided any 's.215 notice', paid the rates and Council Tax arrears on the Shops and left a 'development pot' for the Co-Op (I will find that but for the Krishans' intervention, it would have been a 'no brainer' by April 2006 for her and Bobby). The Claimant's family were still paying arrears on the Shops in October 2005, not pushing the Krishans to pay. There was no 's.215 notice' on the Cinema until 25^th June 2008: before the covert recording on 30^th June when Mrs Krishan said 'when the first lot of CPO orders came'.

194. Mrs Krishan did not claim she had mixed up s.215 notices with CPOs - indeed there were neither before 2008 (and never a CPO). But her comment then supports the Claimant's account that the Krishans had told her there were actually CPOs (not just 'likely' ones) before. In her 2022 statement, the Claimant said they told her in 2005 that 'CPOs had been applied on the Properties' which 'meant they could be snatched away from her leaving only liabilities' and 'she could be left 'penniless' and 'homeless' and 'it was essential to remove them to protect their value'. This is similar to the core of her account in her 2009 statement that 'CPOs had been applied against all the Properties' and the Council could 'snatch' the Properties, leaving her 'penniless' and 'homeless'. Her solicitors put it differently in late 2008, but at that time whether there had been CPOs or not was still being clarified with the Council. Given the Claimant's patchy memory, in fairness to the Krishans, I have also considered whether she may have misremembered them telling her CPOs 'had been applied for' on the Properties - as a misunderstanding of 'the start of the process' as stated on 30^th June, or indeed 'investigation' of a s.215 notice on the Cinema in October 2005. However, neither was put to her - the Krishans say she mentioned both, not that she misunderstood them mentioning either. Moreover, the Claimant and Bobby already knew what the Council had said on 30^th June about CPOs and Dr Krishan said he did not need to mention it. As I noted, whilst he said the Claimant mentioned 's.215 notices', there were no such s.215 notices until 2008 and it was only 'investigated' in October 2005. Indeed, I find that the Claimant's clear and consistent recollection of being told about CPOs by the Krishans - rather like her clear and consistent recollection of the proposed auction in 2008, was a strong shock clearly lodged in her memory.

195. Therefore, on all the evidence, I find on the balance of probabilities that over the Summer of 2005, after Dr Krishan had been authorised by the Claimant to deal with the Council, he and Mrs Krishan arranged to meet the Claimant (I accept the little detail in her 2022 statement that it was in Debenhams). I find on the balance of probabilities that the Krishans between them told the Claimant that 'CPOs had been applied on the Properties' which 'meant they could be snatched away from her leaving only liabilities' and 'she could be left 'penniless' and 'homeless'. However, I accept the Claimant had been told by Bobby that CPOs were a last resort, but she had not understood them to have such dire consequences and she was very worried. However, I also find on the balance of probabilities that the Krishans reassured her they were professionals, with experience in property development and that she should leave this to them, as it was 'payback time' for the help the Claimant had given to Mrs Krishan in her childhood. This was the start of what I am calling the 'stick' and 'carrot' of the Krishans' 'rescue narrative'. I find the Claimant told Bobby, who was also shocked and they visited the Krishans. I have quoted his account above at paragraph 186 and I explained his shock at this meeting explains his evidence about 'not picking up on the CPOs'. I find on the balance of probabilities that as Bobby says, the Krishans told them: 'the buildings had become a liability and if the Council was not properly dealt with, the Claimant would be left with huge debts and legal costs'. Dr Krishan mentioned she would be left 'bankrupt and homeless' and mentioned prison. He also said they had 'experience in fighting CPOs' and 'knew inside out the tricks the Council would use'. Mrs Krishan said they would not allow the Council to take away the 'children's birthright', would 'fight her corner' and that it was 'payback time for all that she had done for Parkash in her childhood'.

196. Indeed, on the first alleged false representation, I find on balance of probabilities the Krishans did say to the Claimant words to the effect that the Properties were subject to CPOs (or even if I am wrong about this, that they were 'likely' to be):

196.1 I find on the balance of probabilities that in addition to these initial conversations, between July and November 2005, the Krishans incorrectly (whether fraudulently I decide later) repeatedly told the Claimant words to the effect that 'CPOs 'had been applied on the Properties' that could leave her 'penniless' and 'homeless'; and also 'it was essential to remove them to protect their value', for five reasons, individually and cumulatively. Firstly, this was a 'stick' to induce the Claimant to transfer the Properties - to 'get her off the fence', as Dr Krishan said to HHJ Purle QC of what he found to be the false documents in 2008 (see Gasztowicz Judgment at [113]). Indeed, such wider evidence (summarised at paragraph 189 above) also supports that finding, including my findings below about January 2006. Secondly, the Claimant's account in 2009-2010 was broadly consistent with her 2022-2023 account. Thirdly, that account is corroborated by Mr Davies' note on 16^th November saying: 'needing help with bankruptcy and eviction' and 'CPOs losing them' (not 'threatened' or 'likely' - whatever exactly was said and whoever said it to Mr Davies in the circumstances). Fourthly, it is also corroborated by Mrs Krishan's comments in June 2008: 'When the first lot of CPO orders came' (not 'were threatened') and 'back to [being] saddled with CPOs....again'. As I say, I do not accept the Claimant mixed up (non-existent) s.215 notices with (non-existent) CPOs - nor do I consider did the Krishans - who unlike her were in contact with the Council. Fifthly, that point answers Mr Graham's submission that 'everyone knew there were no CPOs' and Bobby had been told the position in June. However, since July, Bobby and the Claimant had relied on Dr Krishan to communicate with the Council, so for all they knew, the position may have changed. Yet the Krishans were careful not to say CPOs had been made to Bobby.

196.2 Even if I am wrong about that, all the same factors support my alternative finding on the balance of probabilities that the Krishans effectively told the Claimant (and indeed Bobby on the occasion quoted above) that CPOs were 'likely' i.e. 'if the Council were not properly dealt with', as Bobby put it. Mr Graham's point here was different - that if they did say this, CPOs were indeed 'likely'. However, as shown by Bobby's account which I accept, the Krishans exaggerated the likelihood and the consequences of CPOs - with 'bankruptcy', 'homelessness' and even 'prison'. The opposite was in fact true - for the Council - whilst starting to discuss s.215 notices for the Cinema in October 2005 - CPOs still were (and remained) a 'last resort'. Indeed, even if the Claimant had convinced herself of all that in July, by November, Dr Krishan was in a position to correct and reassure her. Even if it was her talking to Mr Davies, he did not do so. I find deliberately.

197. I deal next with the third alleged false representation i.e. but for the CPOs, the Properties would be worth £300,000 on the open market. Mr Graham submits that the Claimant and Bobby were in a better position to know the Properties' value - the Krishans were not expert valuers and relied on the earlier valuations consistent with a total value of £300,000. However, I find Dr Krishan came up with this value, which was incorrect (whether fraudulent I will decide below):

197.1 Since Dr Krishan thought the Claimant had 'no business acumen', it is implausible that he simply took her word on valuation. By mid-July, he had the July Donaldsons report which included undated valuations for the Co-Op of £108,000 and Cinema £160,000 and I find on the balance of probabilities he not her 'rounded up' for the Shops to £300,000. Indeed, in cross-examination, Dr Krishan accepted he had said in his 2010 evidence 'We came up with residual values and Mrs Takhar was perfectly happy'.

197.2 In fairness, I accept the Krishans would not have realised the Properties in late 2005 were worth something like £890,000 as Ms Dobson assessed and I find for April 2006. Nevertheless, even extrapolating back a few months in what Ms Dobson called the 'hot market', I find Dr Krishan's £300,000 valuation was far too low, yet he did not get new valuations, despite presenting himself to the PCT in August as an experienced developer.

198. This leads to the second alleged representation: that with a CPO, the Properties were 'worthless' or only worth £100,000. Dr Krishan accepted even if there had been a CPO, the Properties were still worth £300,000, not £100,000. Mr Graham therefore accepts if the Krishans had said that due to the CPOs or threat of them the Properties were only worth £100,000, that would be a clear misrepresentation. But he submits the Krishans never said that they were, still less that they were 'worthless'. However, I find on the balance of probabilities that they did both:

198.1 Firstly, I found above the Krishans told the Claimant the Properties 'were worthless and it was essential to remove the CPOs to protect their value'. This ties in with what Mrs Krishan said in 2008 covert recordings:

"....[B]y the time you paid everything back...they were actually worthless on paper.....I know you like to think that, yes, you know, they are there, but they are actually worthless.." (my underline). Mrs Krishan was there saying that the Properties had been worthless due to her debts in 2005 (whether or not saying they were still such in 2008).

198.2 Secondly the Krishans were therefore not telling the Claimant the Properties had no intrinsic value - they plainly did of at least £300,000. Instead, they said they were 'worthless to her' after her debts, as Mr Graham argued was true. But as he also said, they all agreed they were worth £300,000, yet her modest debts were c.£35,000, so they plainly were not 'worthless to her'.

198.3 Thirdly, that leads to what SB was later told - and later said to the Claimant in a letter - that '£100,000 was the value of the Properties subject to a CPO'. I will find below that SB had been told that by Dr Krishan.

198.4 Fourthly, it is totally implausible that the Claimant came up with a valuation of £100,000 (flatly contracting the valuations for the Co-Op and Shops Bobby was given by the Council on 30^th June) which the Krishans simply accepted. The Claimant had also entrusted Dr Krishan with dealing with the Council on her behalf and relied on what he told her. Therefore, I find it more likely than not that he came up with the £100,000 value himself.

198.5 Fifthly, this was bound up with the dire threats of 'bankruptcy' and 'homelessness', yet given she not only owned her own mortgage-free home but could have solved all her financial problems and created a 'development pot' for the Co-Op just by selling the Cinema, that was extremely unlikely.

199. However, the Krishans always balanced their 'stick' with their 'carrots'. On 22^nd July 2005, Mrs Krishan paid the two cheques totalling £5,000 to the Claimant. In October, she also took her to Spain for a break the Claimant clearly needed, still struggling financially and caring for Arun and Sukhjeet. Moreover, I also accept the Claimant's evidence that Mrs Krishan also presented transfers as positive - a way to deal with the CPOs (never properly explained) and to avoid any claim by Ian. Moreover, I find the Krishans reassured the Claimant the transfers to a company was to fight the CPOs and renovate the Properties to rent them out. I find she never agreed for the Properties to be refurbished and sold. They were her 'family properties' and Dr Krishan himself accepted she was reluctant to sell (as shown by her dismay in 2008 when the Co-Op was up for auction). I find proved on the balance of probabilities the Claimant's pleaded fourth false representation: that if she transferred the Properties to Gracefield, they would ensure the threat of CPOs was removed and refurbish and manage them for her benefit. (Again, I come back to the issue of fraud). However, the fifth is not proved: whilst the Krishans called it an 'act of charity', the Claimant knew they would also benefit.

200. I also find on the balance of probabilities that the Krishans reassured the Claimant that, whilst the Properties would be transferred to the company to undertake the developments and she had a 50% shareholding, this was only a formality and beneficially the Properties still belonged to her which she believed. As she said:

"I recall asking [the Krishans] what would happen to the Properties when they were transferred to the company. The[y] had been in the family for many years and I was anxious to make sure they stayed that way. So I needed to know..whatever the Krishans did with the[m], they would remain in my ownership. [They b]oth repeatedly assured me that the transfer of the Properties was only a formality and that of course they would still be mine."

Whilst that forms part of her abandoned contract claim, it is also part of the fourth false representation - that Gracefield would manage the Properties 'on her behalf and for her benefit' - and also key to her resulting trust claim. I accept it because:

200.1 The Claimant has been consistent throughout she believed the Properties would still belong to her after transfer to the company, which Mrs Krishan said was only for 'administrative convenience' so 'legal and above board'.

200.2 It fits very clearly what Mrs Krishan said in the June 2008 covert recording: 'Although we are handling it the property is yours'. She said this shortly before saying 'We did say it was going to be 50/50 on everything we did' and the Claimant saying 'Yes', which needs to be seen in that context. It was not 50/50 ownership but 50/50 on the development, albeit the Krishans' expenditure repaid from the Claimant's share of rent, not sale proceeds.

200.3 It also fits what Mrs Krishan said in a May 2008 covert recording: "I have no vested interest in them, but I know you have because that's your life'."

200.4 That strong attachment of the Claimant to her 'family properties' and her fear of Ian taking them is consistent with Mrs Krishan also saying in 2008: 'There is no way my sister is going to get caught up in the hands of [Ian]' and persuading the Claimant the company would protect them from him.

200.5 It also fits the Claimant seeing the Properties as belonging to herself and Bill, as I said at paragraph 149: and so not agreeing to transfer until he did.

201. Therefore, on 5^th November 2005, after the Claimant and Mrs Krishan got back from Spain, the Claimant and the Krishans went to see the Properties with Bill. The Claimant said she travelled with Mrs Krishan, whilst Dr Krishan drove Bill and spent the day talking to him and asked him for the keys, which Bill gave to him. So, the Claimant knew Bill also agreed, which I find then enabled her to agree in principle to the transfers. She gave the reasons in her statement:

"Ultimately, however, I felt trapped. I was too afraid that I would lose the Properties to the Council and end up, as the Krishans described it, penniless and homeless. I was too tired to face this problem on my own, but Parkash's warnings, echoing my own concerns, that I should not be burdening Bobby with my problems were ringing in my head. Moreover, what the Krishans were offering was exactly what I needed help with - they seemed to be offering a perfect solution to my problems, because I could both ensure that the Properties were put back into good condition, but also keep them in the ownership of me and my family. So I eventually agreed to accept their help"

I accept that and underline it to stress both carrot and stick: 'the rescue narrative'.

202. Once the Claimant had agreed in early November 2005 to transfer the Properties to a new company, Dr Krishan acted quickly. Mrs Krishan chose the name 'Gracefield' and once the Claimant handed over the deeds on 14^th November, Dr Krishan instructed SR at his accountants to incorporate it and on 16^th November confirmed to SR its shareholdings: 50% to the Claimant, with 25% each to the Krishans. But as I said, the Claimant was told the Properties still belonged to her, so transfer was just a formality. I find on the balance of probabilities their agreement was for a '50/50 share' of Gracefield and the benefits from renting, albeit the Krishan's expenditure would be repaid from the Claimant's share. From the letters from Donaldsons to Dr Krishan (of 1^st November and 23^rd November 2005), I find that he met them and an officer from the Council on 16^th November - the same day as Mr Davies - it is unclear which was first. I have seen no note of that meeting, but I assume pending the PCT's response on the health centre, he proposed a similar plan as SR told SB on 18^th November he had told her: that paying off the Claimant's debts would be 'his way of buying into the properties' and he planned to demolish the Cinema and build flats; and at the Co-Op to build 3 units and upper floor flats; and in each case to rent out the flats or to sell them.

203. However, when on the same day Dr Krishan - now with Mrs Krishan and the Claimant - met Mr Davies, Mr Davies' note mentions nothing about any plan to sell the Properties. As I said at paragraphs 173-174 above, given all the parties' unsatisfactory evidence about this meeting, I am wary of making findings about exactly what was said and who said it, but I do find Mr Davies' note to be a reliable and contemporaneous record of the gist of the meeting. I find on the balance of probabilities that gist is more consistent with the Claimant's account of what she had been told by the Krishans since July - what I am calling their 'rescue narrative' - than it is with the Krishans' account of what the Claimant told them. This is why Mr Davies was told at the meeting - either by the Claimant or the Krishans - that she 'needed help with bankruptcy and eviction' as due to 'CPOs' she was 'losing' the Properties. If necessary to make a finding on who was relaying this to Mr Davies, I would find on the balance of probabilities it was Dr Krishan - whose statement did not even mention the Claimant being there.

204. Dr Krishan speaking (at the very least towards the end) would also be consistent with the comment that the 'deal was in her favour as Dr K was to do finance'. That is the context for the description of a 'verbal discussion agreed 50/50 share with a further written agreement sorted'. As Mrs Krishan later put it: 'we did say it would be 50/50 on what we did' as the Claimant acknowledged. However, as I said at paragraph 174 above, that same week, Dr Krishan had arranged the incorporation of Gracefield with the Claimant to have 50% of the shares and the Krishans 25% each. Despite what Dr Krishan told SR in the Claimant's absence on 18^th November, there is no clear reference in Mr Davies' note to 'sale'. I find 'sale' was not mentioned in front of the Claimant, which is one reason why she was quite so shocked by the auction in March 2008. For that and the other reasons at paragraphs 171-189 above, I accept on the balance of probabilities the Claimant's evidence that she never agreed to refurbish and sell the Properties, but only to rent them. Mr Davies' note is not inconsistent with that. However, as I say, that agreement is also inconsistent with a pure 'act of charity': which reflects their refrain of 'payback for the Claimant's help', but clearly by November 2005 she knew the Krishans stood to benefit. Then Dr Krishan got to his point: he needed an architect and Mr Davies suggested Mr Johnson.

205. On 28^th November, Dr Krishan instructed his regular solicitor, Mr Whiston of Pitt & Cooksey Solicitors, enclosing the deeds explaining that Gracefield had been incorporated (with the three of them as directors and shareholders) for the Properties to be transferred from the Claimant and instructed him to implement that. On 14^th December 2005, Mr Whiston confirmed all were mortgage-free and asked Dr Krishan to confirm whether there would be consideration for the transfer or whether they would be a gift. He added the Claimant should take tax advice. Of course, Dr Krishan had already instructed SB, but he was her client, not the Claimant. Then on 7^th December, Dr Krishan first met Richard Johnson, the architect, introduced by Mr Davies. The Claimant was not present. They visited the Properties and Mr Johnson later said in his letter of 12^th December 2005, he felt the Shops required a structural engineer but could be refurbished. He felt the Cinema was derelict and they agreed to knock it down for a residential development to be built. The Co-Op was empty and the building was in poor repair, with broken windows and brambles. They agreed to keep the ground floor as retail with the upper floors as flats. The same day, Dr Krishan wrote back to Donaldsons to confirm that both Mr Johnson and SB were involved. They acknowledged that on 16^th December.

206. As 2006 began, Coventry CC were still receiving requests for updates from councillors about the Cinema - pressing for demolition. It was decided to review whether a CPO could force development of the site which was to be considered. However, it is confirmed by Mr Duncan and Mr Todd's uncontested evidence that it never even got to the first stage for a CPO of a Cabinet report. As Mr McGuigan later replied on 27^th March 2006, whilst there was a decision to use the CPO process as a 'last resort', there was now a development company and things were 'moving in the right direction'. I find Dr Krishan would have known this all along. Doubtless it would have been confirmed to him in his frequent dealings with the Council and their agents Donaldsons in Autumn 2005, not only by his discussions with the planners referred to in his letter to the PCT in August, but in his November meeting with Donaldsons and the Council on 16^th November.

207. On 30^th January 2006, Ms Hayward wrote to SB to say they were 'encouraged that Dr Krishan has now become involved', but wanted to know more about his track record. The plans were for 12 residential apartments at the Cinema site, with 'rough estimate costs' of £606,000 to build; and at the Co-Op, a retail unit on ground floor and 12 apartments above costing £925,000. Ms Hayward added that 'no allowance has been made for land value as the land [will be] owned by the company' (she noted above it was still owned by Dr Krishan's 'family'). On 21^st February 2006, SB replied to Ms Hayward to explain about Dr Krishan's health centre project in Wolverhampton with a build cost of £2.1 million and she added that Dr Krishan 'had secured funding for the development'. However, by that stage, Dr Krishan had done no more than set up Gracefield's bank account.

208. SB's letter brings me to her involvement following SR's email on 18^th November. As I said earlier, in brief SB's evidence was that her initial meeting about Gracefield was with Dr Krishan at his home (when discussing other business) and he mentioned the Properties owned by the Claimant and the plan to transfer them to the company, develop and sell them to split the proceeds. However, I do not accept the latter was discussed in front of the Claimant. SB met her with the Krishans at their home on 20^th January 2006 and SB took a contemporary note. The 'client' at this stage is noted to be Dr Krishan and I find that it was him doing most of the talking. The Claimant was largely a 'passenger'. She accepts she briefly met SB but became emotional about Bill and left them talking and left the room, which explains why she cannot remember the discussion well. Certainly, there would have been nothing in it to change her understanding that the Properties would still belong to her and the transfer was for 'administrative convenience'. This may also explain her lack of interest in the mechanics of that. SB remembered the Claimant's gratitude to the Krishans and said in evidence that she also made 'the odd point'. That was probably the Properties being owned jointly for approximately 10-11 years with the Cinema bought in 1986, with 1999/2000 'sale range' when she acquired the Properties from Bill - who is later referred to as 'still being a partner in the business but being ill in the mid-1990s' and also confirming her benefits position (Income Support and Child Tax Credit).

209. Speaking of the Claimant's finances, it is undisputed that from November 2005, the Krishans started paying the Claimant a monthly maintenance of £400 and also discharged the bills on the Properties which she had been struggling to do. Therefore, whilst the Claimant said she could have managed without it, it is clear at the time that she was not managing without it and that maintenance was vital to her and also made her feel financially dependent on the Krishans. Turning back to the SB meeting, I find Dr Krishan told SB they would fund the development, which would have benefits for the Claimant, such as them paying the arrears (said to be £7,500) and an allowance to her of £400 a month starting two months earlier following the £5,000 (on the credit cards in July). The Claimant now accepts that in total from December 2005 to September 2007, she was paid £13,800 for her maintenance, which less the £5,000 would equate to 22 monthly payments. That is effectively the same as on the Original Balber Takhar Account. However, whilst she also accepts the Krishans paid £5,672 in rates and other arrears, that is much lower than in the Balber Takhar Account and I return to it. In any event, this financial support from the Krishans from late 2005 was invaluable for the Claimant in financially managing, but also crucial in cementing her trust in them.

210. I find that after the Claimant left the room, Dr Krishan relayed to SB in January their actual plans for the Properties in much more detail than before Mr Davies in November. The Co-Op was said to have a £1 million cost to convert to shops and flats; whilst the Shops were to be converted back into residential accommodation. Though there was subsidence, a grant was available and the Krishans were also paying the rates at that time. It was noted the earliest date for the build would be Summer 2007. Yet tellingly, whether or not the Claimant was present, as SB accepted in evidence in 2010: the notes simply do not mention the possibility of sale. The closest they come is a reference to developing the Cinema '15 flats x £150k £55-60k'. SB in her evidence did not explain what that meant. However, especially given the reference in the next line to 'Co-Op £1m spend to convert', I find the reference to the Cinema was development costs not sale prices.

211. Unlike the Davies meeting two months earlier, there was discussion of the values. The total market value of all the Properties was said to be £300,000. In her 2010 evidence, SB said she understood that had been agreed before the meeting. SB accepted that she had seen no formal valuation of that. It was broken down into the Co-Op as £120,000, the Cinema £90,000 and the Shops £90,000 ('3 x £30k'). SB noted she needed to check the position on VAT with the Co-Op. SB's note mentioned 'Post April 2006' (perhaps the plan to stagger the transfers). However, just as with Mr Davies in November, there was no reference in SB's 20^th January meeting notes to any payment (beyond arrears and maintenance) to the Claimant, still less to any 50% profit share: consistent with the Claimant's recollection that it was not discussed in front of her. In fact, SB's 2009 statement and 2010 evidence was that the profit share was mentioned by Dr Krishan in discussion in late 2005, not at the 2006 meeting. I find that even if the Claimant was present, she would have 'tuned' out from the detailed business discussion. In any event, I find there would have been nothing in it to change her fundamental understanding that the Properties would still belong to her (and Bill) after the 'formal' transfers.

212. Indeed, SB added in her statement after that meeting, she considered there were actually two tax options: either the parties' plan for the Claimant to transfer the Properties to Gracefield legally, or for her to retain them and for Gracefield to act as the developer. The Claimant does not mention that, but had she heard it, it would have confirmed her view that the transfer was just a formality for tax reasons and the Properties would still belong to her (and Bill). Dr Krishan accepts SB said this to him, so it cannot have been finally decided by the 20^th January. However, he wanted the Properties transferred to a company he could control, not the burden of managing them without the benefit of ownership. There is a clue to how he responded to this unexpected threat in an important note from SB dated 20^th February 2006. She said she prepared part of the note in advance of the meeting of 20^th February (I find the first page) and part at the meeting itself (I find the second page). The Claimant did not recall this meeting, but I find that as the topic was tax planning (even though it was her potential tax), she 'tuned out' and has since forgotten about it. However, the contents of the first page of SB's note - written before the second meeting - are very revealing. SB set out two options, although neither appear to involve the Claimant retaining them. 'Option 1' was based on a sale value 'Per CPO' of £100,000 which following tax calculations would end her up with a tax bill of £24,600. 'Option 2' was based on a sale value 'Est value £300,000' which would end up with a tax bill of £88,600.

213. At this stage, I repeat paragraph 16 of SB's 2009 statement (with my underline):

As I said, in her 2010 evidence, SB equivocated about which director said this. Perhaps by then she realised the significance of what she had said. Certainly, she added that she had been advised by the directors that if the Properties were subject to CPOs, they would be worth significantly less than market value. In fact, it was put to her (correctly), that this was wrong: a CPO entitles owners to full market value less debts, of which she accepted she was unaware. Certainly, Dr Krishan in evidence to me accepted these distinctions between 'CPO values' and 'market values' were wrong. He said he never told SB that - it was the Claimant. If so, it is strange he did not correct her. In fact, I find on the balance of probabilities that Dr Krishan did tell SB - and the Claimant - about the £100,000 'CPO Value':

213.1 Firstly, whilst Mr Graham argued these were in fact SB's values in her tax or accounting exercise, that is not what SB said then, or Dr Krishan says now. Moreover, in her 2010 evidence, SB said the decision had not been based on tax, but on financing the development. She also said that the note should have said £100,000 was the directors' value should CPOs be made.

213.2 Secondly, whilst SB equivocated in evidence about which director gave her the £100,000 'CPO Value', she was clear she only spoke to the Claimant twice; but prepared that part of the note before the second meeting - and there was no reference to the £100,000 'CPO Value' in the first meeting. The only plausible explanation was that Dr Krishan told her that separately, between the two meetings and she then included it in her pre-meeting note.

213.3 Thirdly, that would be consistent with what SB said in her own statement that Dr Krishan told her the values, including the £100,000 'CPO Value'. (Moreover, it is also consistent with my findings at paragraph 198.3 above).

This is why SB prepared the pre-meeting note with those alternative valuations.

214. Moreover, as I noted above at paragraphs 193-198 above, I found on the balance of probabilities the Krishans told the Claimant in 2005 not only that 'the Properties were worthless' but also that 'it was essential to remove the CPOs to protect their value'. In any event, I also find on balance of probabilities that the Krishans told the Claimant (and I find SB - despite her saying 'in the event that') there were CPOs in 2006 before the transfers, shown by documents from March:

214.1 As I will detail below, SB wrote letters to the Claimant and Mr Whiston on 15^th March and the draft PSA in April as if a CPO had actually been made and £100,000 was the Council's valuation. She told Mr Whiston the total sum of £100,000 was 'the value placed on the properties by the council with regards to the compulsory purchase order' and told the Claimant the same day: 'we are transferring the properties in at the value of the compulsory purchase order rather than the true redevelopment value'.

214.2 The Claimant recalls after seeing (I will find, both) those letters, she spoke to Mrs Krishan, who said 'They were just paper figures, set because that was the price the Council had fixed. She again said I had to do this to save the Properties', entirely consistent with SB's two letters and indeed also I find Mrs Krishan reminding the Claimant in 2008: "When the first lot of CPO orders came' and '[We are] going back to the stage where we are saddled with CPOs... again": implying there had previously been CPOs.

214.3 Moreover, the Krishans had a motive to 'return to the rescue narrative' in February 2006: namely both (i) to 'head off' SB's idea for the Claimant to still own the Properties - which is why SB recalled the decision was not on tax grounds - and (ii) obviously it was in their interests to reduce the up-front transfer cost from so-called 'market value' of £300,000.

I accept SB's recollection in her 2009 statement (as opposed to her equivocation in evidence) that 'both of these values were relayed to me by Dr Krishan'. He denied that when it was put to him in cross-examination by Mr Halkerston, but I find on the balance of probabilities that he spoke to SB between the two meetings to rule out the option of the Claimant retaining the Properties (which is why SB remembered that decision had not been made on tax grounds) and to tell her that the Council had made CPOs and fixed the values at £100,000. SB accepted all this because she did not understand CPOs paid market value less debts, as she admitted in evidence. This is why she discussed 'CPO value' ('Per CPO') and wrote those letters. If she had known there were no CPOs (indeed, a 'last resort'), I find she would not have said this. Whilst the Claimant does not recall the 20^th February meeting, she is clear the Krishans regularly told her CPOs had been made. Therefore, even if I am wrong to have found above that the Krishans told the Claimant in 2005 that the Properties were subject to CPOs, I find in any event on the balance of probabilities that one of the occasions they told the Claimant that was before the 20^th February meeting. Since I have found (at paragraph 198 above) the Krishans had also told her that due to the CPOs, the Properties were only worth £100,000, she would have had no reason to challenge - or indeed remember - SB saying at the meeting that the Council had placed CPOs on the Properties valued at £100,000. In any event, I find the Claimant was again a 'passenger' at it. Nevertheless, since unlike the meeting with Mr Davies, I have SB's note and her evidence too, I am in a position to make more detailed findings.

215. At the 20^th February meeting, I find SB discussed the two tax options for the transfer 'price': the £100,000 'CPO Value' and £300,000 'market value'. I find £100,000 was agreed as the 'price'. The £200,000 'deferred consideration' was the balance of the agreed 'market value' of £300,000 (as SB later adjusted in the accounts). I accept Dr Krishan's characterisation to Mr Rodgers that the Claimant (then) had 'no business acumen'. She did not understand the CPO process (how they were made, challenged etc) and specifically that CPOs paid full market value less debts. She also did not expect to be actually paid (or indeed to be treated as loaned) a penny because as far as she was concerned, all these detailed mechanics of transfer were just formalities and tax planning, as the Properties would still really belong to her (and Bill) after transfer into Gracefield's name. So, whilst this was not in fact purely an accounting exercise by SB as Mr Graham suggested, that was how the Claimant understood it: she thought all these were just 'paper figures', as Mrs Krishan would soon call them. However, what was not discussed at the 20^th February meeting was any onward sale of the refurbished Properties.

216. Indeed, SB's note does not refer to any '50% profit share' on sale, as she accepted in evidence. Indeed, her statement itself stated the action point was to 'draft an agreement regarding the £200,000 split over properties', not a 50% profit share. That is also clear from SB's letters to Mr Whiston and the Claimant noted above. I return to both, but quote and underline part of the letter to the Claimant, which again would have reinforced the Krishans' incorrect statement there were CPOs:

"With regards to the payment for the properties, the sum of £100,000 will be transferred to a loan account in your name and the purchase price of the property will be paid out to you once the redevelopment of each plot is completed and the new properties have been sold. In addition, I am also preparing a profit share agreement which will show that additional sums are paid out to you in the first instance as soon as each development is sold. This is due to the fact that we are transferring the properties in at the value of the compulsory purchase order rather than the true redevelopment value. The profit shares allocated to you first will be as follows: 3 houses - £20,000 each; Ritz Cinema - £60,000. Co-Op £80,000. I would hope that the agreement will be sent to you within the week."

217. Going back to late February 2006, as noted above, on 21^st February, SB did write to Donaldsons to confirm Dr Krishan's development experience including on a health centre. But on 23^rd February, Mrs Hayward told Dr Krishan that would go no further, inviting his proposals on use for the Co-Op. (Dr Krishan therefore changed to his back-up plan of mixed retail/residential use discussed with SB). But Mrs Hayward was more positive about the development of the Cinema, enclosing a residential development brief for Mr Johnson. In essence, this was for demolition of the Cinema and construction of a 3-4 storey block of flats (with parking). After another meeting with Dr Krishan, Mr Cocks and herself on 3^rd March to consider Mr Johnson's draft plans, Mrs Hayward noted good progress. The Cinema would have 14 flats in total. The Co-Op would be retail development on the ground floor and 12 flats above - six one-bed and six two-bed flats.

218. Also on 3^rd March 2006, with Donaldsons' blessing to proceed, Dr Krishan set up Gracefield's bank account (as Mr Rodgers confirmed) and Mrs Krishan wrote to Mr Whiston to request him to prepare transfer documentation for the Shops to be transferred to Gracefield in March and the Cinema and Co-Op after 5^th April (as also discussed on 20^th February). On 3^rd March, Mrs Krishan also prepared a letter in the Claimant's name confirming she instructed Mr Whiston to transfer the Properties to Gracefield. As noted above at paragraph 99, the format and mis-spelling of SB's firm's name was identical, showing she drafted both. The Claimant signed it, not only as she implicitly trusted her, but also because I find she had recently been in two meetings with SB to discuss it. As I say, in the first, she became emotional and left the room. The second, I found she 'tuned out' of discussions of further mechanics and tax implications. But by the end of that meeting at the very latest (in fact I find months before), the Claimant had been told by the Krishans (or at the very least, had been told by them through SB) that CPOs had been made and the Properties were only worth £100,000. Yet as I have also found on the balance of probabilities, nothing had been discussed at either meeting to change the Claimant's established understanding that after formally 'putting the Properties in Gracefield's name' to protect them from the CPOs (and Ian) the Properties would really still belong to her (and as she saw it, Bill too).

219. Ironically, on 14^th March (see paragraph 223 below) the Council discussed their response to Councillors about the Cinema, saying their plan of warning of CPOs as a last resort then negotiating had seen progress. In stark contrast, as SB had been told by Dr Krishan CPOs had been made valued at £100,000, on 15^th March, SB wrote her letter to the Claimant (quoted again below); and this to Mr Whiston:

"Further to a meeting with the above-named clients [Gracefield and Mrs Takhar - now also a client] it has been agreed between the parties that the properties currently owned by Mrs Takhar will be sold to the... company... Pre 31March 2006: The [Shops] for a value of £10,000 each. The sum of £30,000 is the value placed on the properties by the council with regards to the compulsory purchase order. Post 6 April 2006 (but before 30 April): The [Cinema and Co-Op], at a value of £30,000 and £40,000 respectively. Again, these values are the amounts placed on the properties by the council with regards to the compulsory purchase order..." (my underline)

Notably, SB did not mention to Mr Whiston anything about any '£200,000 split' or deferred consideration for the 'sale', still less any 50% profit share.

220. The Claimant has always accepted seeing a copy of SB's letter to Mr Whiston which he sent to her on 15^th March asking her to confirm the values. She recalls reflecting on and querying 'sale' to Gracefield and the low valuations (I find the Krishans had told her the £100,000 'CPO value' before and she had 'tuned out' of SB's meeting, but she was now being asked to confirm it by a professional). Whilst she earlier denied seeing SB's letter to her, both in her 2009 statement and her 'calm' cross-examination she accepted she did. It stated as follows:

"Please find enclosed a copy of the letter I have today sent to the solicitor advising him of the sale of the properties into Gracefield. He will no doubt be contacting you shortly to confirm you are happy with the instructions. With regards to the payment for the properties, the sum of £100,000 will be transferred to a loan account in your name and the purchase price of the property will be paid out to you once the redevelopment of each plot is completed and the new properties have been sold. In addition, I am also preparing a profit share agreement which will show that additional sums are paid out to you in the first instance as soon as each development is sold. This is due to the fact that we are transferring the properties in at the value of the compulsory purchase order rather than the true redevelopment value. The profit shares allocated to you first will be as follows: 3 houses - £20,000 each; Ritz Cinema - £60,000. Co-Op £80,000. I would hope that the agreement will be sent to you within the week. I trust this is all clear however, should you have any further queries, please do not hesitate to contact me. Kind Regards....." (my underline).

This not only referred to 'sale' as opposed to 'transfer' at £100,000, but also its payment to a loan account. It also explicitly told her (I find for the first time) of the prospect of later sale of the Properties after refurbishment - the opposite of what she (let alone Bill) wanted. However, rather than ask SB about this, such was her implicit trust in Mrs Krishan, the Claimant asked her instead. She visited Mrs Krishan on 24^th March 2006 to query it, yet then signed this letter to Mr Whiston, again in terse professional language I accept (see paragraph 99) was drafted by Mrs Krishan (who was copied into SB's letter to the Claimant):

"I have met and discussed the best way forward for redevelopment of my properties with [SB] and you will have received a letter dated the 15^th March [from her]. I confirm that the [Shops] are to be sold to the company at a value of £10,000 each pre-31^st March 2006. I also confirm that the former Ritz Cinema and the Co-Op site are to be sold to the company for £30,000 and £40,000 respectively, post 6^th April 2006 but before the 30^th April...."

221. Given the Claimant's signature in this letter was found to be the source of the forged PSA in the Gasztowicz Judgment, it has been explored in detail in evidence. I note the Claimant addressed it in her 2009 statement much closer to the time - before repeated 're-retrieval'. Although confusingly dealt with in two different places (paragraphs 303-304 and 319-321), she appears to be discussing one conversation about Mr Whiston's letter and SB's letters and the draft response. The Claimant said she 'plucked up the courage to question her' but Mrs Krishan said they were just 'paper figures' and 'the price set by Coventry CC for them' (as the Claimant had been told in February by the Krishans and - unwittingly, also SB) and 'They had to do this to save the Properties' and pressed her 'Do you not want to save them ?' stressing 'family honour' and explaining the transfers were split as it was more 'tax efficient'. The Claimant said she was also reassured by Mrs Krishan's explanation of SB's letter to herself as 'just the hoops they had to go through to allow them to deal with the Properties on her behalf' and such was her trust in Mrs Krishan, she accepted it. The Claimant's 2022 statement covers some of the same ground and in evidence, she added Mrs Krishan had called the letters 'legalese' that the Claimant accepted as she 'was not a numbers person'. She therefore also accepted Mrs Krishan's word the transfers had to be done to save the Properties from the CPOs, so she signed Mrs Krishan's draft. Whilst Mrs Krishan denied it, on the balance of probabilities I accept this was the gist of what she told the Claimant on 24^th March 2006. Indeed, it is pretty similar to what Mrs Krishan told the Claimant in the 2008 covert recordings. The 'stick' were the CPOs which reduced the Properties' value and meant 'she had to do this to save the Properties'. The 'carrot' was Mrs Krishan's reassurance of the Claimant that this was a question of 'family honour' and these were just 'paper figures' or 'legalese': presented as SB's tax/accounting exercise, even though it was not, as I discussed at paragraph 215. Therefore, I find on balance of probabilities despite SB's letters of 15^th March, the Claimant was still reassured that even after transfer the Properties would really still belong to her (and Bill) and indeed, despite references to 'sale', the plan in reality was still to rent, not sell.

222. On 29^th March 2006, Mr Whiston sent Dr Krishan (not the Claimant) the three TR1 transfer forms on the Shops and explained the Claimant needed to sign them in the presence of an independent witness (who was Mrs Beeston, Dr Krishan's receptionist). On 31^st March, Mr Whiston sent on another two TR1s for two of the three Shops, with consideration for each as £10,000 each (and later for the Cinema £40,000 and Co-Op £30,000 - totalling £100,000 for all the Properties). The Claimant now accepts that she signed and Mrs Beeston witnessed the three transfers for the Shops (with no reference to trusts) on 31^st March, but I accept her recollection: only after Mrs Krishan said she needed to sign them to save the Properties as 'the Council had become more aggressive'. This was really a continuation of Mrs Krishan's 'rescue narrative' throughout.

223. I should add here that on 22^nd March, Mr McGuigan at Coventry CC emailed Mr Duncan asking him to draft a reply to the councillors' January letter pressing for action on the Cinema, following an email discussion about it earlier in March. Somewhat ironically given Mrs Krishan drafting letters for the Claimant to sign, Mr Duncan did so for Mr McGuigan which was sent out on 27^th March. As I noted above, it said in February 2005, the CPO process had been approved in principle as a last resort. The letter set out the progress suggesting it was 'moving in the right direction' but 'if progress stalls, the option of compulsory purchase remains provided it can be justified and financed'. So, internally within the Council, the officers were even telling Councillors that CPOs were only 'an option'. The Krishans knew this, but it was totally different from what they had incorrectly told the Claimant: that CPOs had now been made, they meant the Properties were only worth £100,000 and with her debts 'worthless'.

224. However, unaware of that, such was the trust that the Claimant now placed in the Krishans that on 3^rd April 2006, a letter in her name (which again I find was drafted by Mrs Krishan) asked him to prepare her a new will to benefit in equal shares Bobby, Sukhjeet and Arun - Nina was not mentioned - and tellingly, to have the Krishans as the executors. Optimistically, he was asked to draw this up before her holiday to India (in fact with Mrs Krishan) that week and also to draft up a formal Power of Attorney for Bill who was mentally ill. I do accept that the will is what the Claimant wanted to do - in May 2006, she confirmed as much to Mr Whiston in a meeting without the Krishans. However, by this stage, the Claimant was not only trusting them with the Properties through their company (albeit she was a director and 50% shareholder at that stage), but also trusting them with the execution of her will. Nevertheless, on 5^th April, Mr Whiston wrote back to the Claimant and rightly explained he could not prepare a will for her without meeting her and confirming her identity. He again rightly added that he could only draw up a Power of Attorney on Bill's own instructions, but questioned whether he would have mental capacity for it.

225. The same day, 5^th April, Mr Whiston also wrote to the Claimant a letter. As well as confirming receipt of the signed TR1s for the Shops, he asked whether the £30,000 consideration for them would be paid to her on completion of the transfers or whether she had already been paid and if so, when. He added:

"You will appreciate that as I have acted for Doctor and Mrs Krishan (albeit in a personal capacity) in the past, there may well arise a conflict of interest if I act for you in connection with the transfers of the properties to the company. Accordingly, I need to advise you to take independent advice from another solicitor in respect of the proposed transactions. If you do not wish to take such advice, I would be grateful if you would telephone my office immediately upon receipt of this letter to confirm that you wish me to proceed with the transactions and then confirm the same in writing."

Therefore, because Mr Whiston had a potential conflict of interest, he (again, rightly) advised the Claimant to seek independent legal advice or to confirm by telephone and in writing that she wished him to proceed with the transactions. However, the transaction Mr Whiston mentioned was simply the transfers he had prepared. He did not refer to any 'profit share', because he was not told about it. He did not even know £100,000 was to be 'paid' to her loan account.

226. The Claimant responded in the one letter from her in her handwriting of 6^th April. But she says she was just writing down what Mrs Krishan told her over phone to write. I accept that, especially given the again rather formal language and the rush to get this done as Thursday 6^th April 2006 was only two days before she and Mrs Krishan were due to head to India on the Saturday. It said:

"Thank you for your letter received this morning. I wish to confirm that there is no conflict of interest regarding the transfer of the properties to the above-named company. As requested, I have spoken to your secretary of the same and am forwarding this letter accordingly."

227. Mr Whiston wrote back on 10^th April, although by that time the Claimant and Mrs Krishan were in India. His letter replied:

"Thank you for your letter of 6^th April. I think that you have misunderstood the situation, as I was not implying that there was a conflict of interest between yourself and Doctor and Mrs Krishan. What I was suggesting was that there may be a conflict of interest for me in acting on your behalf and protecting your interest and acting for Doctor and Mrs Krishan in protecting their interest. I have taken your letter as approval to continue with the transfers and that in this respect you will act on your own behalf. I will let you have further transfers for signature in respect of the remaining properties in due course."

228. On 12^th April, whilst the Claimant and Mrs Krishan were in India, Dr Krishan met SB who handed him a draft of the profit share agreement (as she annotated 'passed to client 12 April 2006') - the 'PSA' on one copy of which the Krishans later forged the Claimant's signature. I have quoted that at the start of this judgment, but will do so again. I set it out almost in full (again noting SB's language at the first (b) is consistent with thinking there actually was a CPO):

"THIS PROFIT SHARE AGREEMENT is made on 1 April 2006 BETWEEN Balber Takhar....('Mrs Takhar') of one part and Gracefield Developments Limited....('the company') of the other part....WHEREAS

(b) Mrs Takhar has sold 3 lots of properties to the company. The value placed on these properties is £100,000 which represents the value of compulsory purchase orders.

NOW THIS DEED WITNESSETH:

2. The company covenants with Mrs Takhar the following:

(a) The £100,000 purchase price of the properties shall be split... £30,000 - three residential properties [i.e. 'the Shops'];

£30,000 Ritz Cinema Site

£40,000 Former Co-Op Site.

This sum shall be placed on a loan account within the company and shall be paid to Mrs Takhar on the completion and sale of each site.

£60,000 - three residential properties (£20,000 each)

£60,000 - Ritz Cinema Site.....£80,000 - Former Co-Op Site.

Mrs Takhar shall also receive 50% of the profits on the sale of each site. The treatment of the payment of the profits will be discussed at the relevant time and take into account Mrs Takhar's personal taxation position................. B TAKHAR.........

.FOR AND BEHALF OF GRACEFIELD DEVELOPMENTS LTD .... DIRECTOR....SECRETARY...."

229. The PSA needs to be seen in the context of my earlier findings at paragraphs 203-204, 210-212, 215-216 and 219-221 above. The PSA is the first appearance of the '50% profit share' in the documentary record. I found it was not mentioned in Mr Davies' note of 16^th November 2005, where I found '50/50 share' was consistent with the agreement between the Claimant and the Krishans to split 50% shareholdings in Gracefield and split 50/50 the profits of renting the Properties (after payment of Gracefield's / the Krishans' costs). This is borne out by the absence of reference to a '50/50 profit share on sale of the Properties' in either SR's note of what Dr Krishan told her on 18^th November - or the 2006 notes of SB on 20^th January or even 20^th February. This is also consistent with SB's letter to the Claimant of 15^th March, splitting the £100,000 'purchase price' of £100,000 on the director's loan account; with a 'profit share' totalling £200,000 - with no reference to 50%. On the balance of probabilities, I accept the Claimant's evidence that it was never discussed with her. Indeed, it is unclear how this 50% profit share for the Claimant came to be inserted by SB. SB said she understood the Claimant and the Krishans would each have 50%. Yet, that is not mentioned in SB's note, nor in her 15^th March letters; she did not specify the Krishans had 50% in the PSA either. In evidence, SB accepted the draft was incomplete and could be interpreted as leaving it to Gracefield, so further split between the Claimant and Krishans. There is no way in 2006 the Krishans would have signed it in those circumstances. As I elaborate later, I reject their entirely new account before me that they signed two copies of (they say, the incomplete) PSA - in April 2006 and in October 2008. It is also inconsistent with the newly-disclosed emails showing SB in October 2008 had no signed copies. I will find the Krishans signed the PSA for the first time in November 2008 after the litigation started. Since I find the Krishans did not sign the incomplete PSA themselves in 2006, they were hardly likely to give it to the Claimant to sign. I find this is why she never saw it, let alone signed it. I reject the vague hearsay accusation of Linda Hunt to the contrary.

230. Finally in this section, in the Claimant and Mrs Krishans' absence, the development progressed. Mr Johnson emailed Dr Krishan on 18^th April to set out the proposed works. On 21^st April, Mr Whiston sent Dr Krishan the transfers for the Cinema and the Co-Op for the Claimant to sign and be witnessed. Meanwhile, SR wrote to Dr Krishan on 24^th April asking about the Properties' proposed use. He answered on 26^th April confirming they expected to sell the flats on the Cinema site (I find not discussed with the Claimant), whereas the Co-Op retail and residential units would be rented. Finally, on 28^th April 2006, again witnessed by Mrs Beeston, the Claimant signed the Cinema and Co-Op transfers (again with no reference to trusts), but again I accept only after Mrs Krishan had told her she was in a fix and needed to get on trying to deal with the Council - one more use of the 'rescue narrative' to carry the Krishans' plan safely through. Finally, they now had control of the Properties.

Development of the Properties: 2006-2007

231. In the context of a judgment which is already so long, fortunately I can deal with the findings of fact in this section very briefly, since as the Claimant's case has been narrowed down, no cause of action arises out of them. I will need to return to more detail in the last section of my findings of fact on 2008, but not as much as in the most crucial section I have just dealt with on 2005-2006.

232. As I mentioned above, on 4^th May 2006, the Claimant met Mr Whiston - for the only time - when she gave instructions for her will. Mr Whiston's 2009 statement confirms that Mrs Krishan brought the Claimant to his office, but did not sit with her. As I mentioned above, the Claimant told Mr Whiston she owned her own home, mortgage-free, valued at £180,000. She confirmed she wanted the Krishans to be his executors and his three sons to have her property equally. However, the Claimant added that she wanted her jewellery to her daughter Nina (formally Satwinder): a family tradition as she explained in evidence. However, that had not been mentioned in the letter the Claimant had signed to Mr Whiston about the will on 3^rd April - again suggesting she did not draft it, but Mrs Krishan did. This is supported by another letter in formal language about the will which did not mention Nina the Claimant signed dated 26^th July 2006. I find if she had written those letters herself, she would have mentioned Nina's jewellery each time, if only so that she mentioned all four of her children in the letters. The Claimant signed her will in these terms in August 2006 - as I say, again illustrating the trust and confidence she still had in the Krishans.

233. Around that time - late April-early May 2006 - Bobby attended the Shops and helped to tidy them up, assisted by Sukhjeet and to an extent, by Bill. They cleared the undergrowth and hired several skips in which to put the rubbish, which all took about two weeks. The Krishans were not present. It seems from Gracefield's accounts (which are no longer challenged on general expenditure) at some point, there was also some scaffolding at the Shops and a skip hired. Other than that, there was no maintenance work carried out on any of the Properties at any point before 2008. They were never renovated by Gracefield.

234. This work Bobby undertook to the Shops may have prompted Dr Krishan on 11^th May 2006 to write to Coventry CC to confirm they were purchased by Gracefield on 31^st March and that they were unoccupied and unfurnished and requested that the business rates would be zero. A 2014 letter from Coventry CC to the Claimant - after the Purle Judgment, the sale of the Shops and Co-Op and the Set-Aside Proceedings had been issued - appears to have overlooked the payments in 2005 (paragraph 172.5 above) but confirmed that Council Tax and Business Rates on the Shops were received in December 2006 and then not again until mid-2007 - and a bill from July 2006 shows that over £800 of Council Tax on one of the Shops had been refunded. I return to that letter below.

235. On 8^th May 2006, the Claimant and the Krishans signed forms setting up Gracefield's bank account with Natwest (as Mr Gasztowicz QC found in rejecting the Claimant's argument that her signature on the forms was forged). However, as confirmed in Mr Rodgers' 2009 statement, it was Dr Krishan who set up the account on 3^rd March 2006 and told him that the Claimant had 'no business acumen of her own' - I have rejected Dr Krishan's denial of that.

236. On 14^th July, Mr Johnson wrote to Mr Rodgers with the plans for the Properties. I do not doubt he was working hard to progress Dr Krishan's instructions and the development and he produced detailed drawings. However, as I said at paragraph 113 above, I found Mr Johnson's evidence on when he met the Claimant before 2010 to be muddled and I do not find he met her until 2007. I find she had very little involvement from May 2006 until March 2008. When Gracefield was incorporated in November 2005, she was a director and a 50% shareholder. By January 2007, she was neither. How this happened from July 2006 is no longer part of a claim, but again proves the Krishans' influence over the Claimant.

237. The first stage was that on 26^th July 2006, the Claimant (as she effectively accepted in evidence - and there is no evidence of forgery here) signed a stock transfer form, transferring one share from herself to Mrs Krishan, so that she was now only a 49% shareholder - losing control over Gracefield. However, because of her lack of business acumen, she would not have appreciated this at the time - indeed I find it was how Mrs Krishan cajoled her into doing it. The latter's plan was clear: to give the Krishans control if there was a deadlock. Mrs Krishan in her 2009 statement said it had 'occurred to her that there was no casting vote in Gracefield', so 'the Claimant agreed that one of her shares should be transferred to me' and she emailed SR on 26^th July and asked her to draw up the stock transfer form and then emailed it back to her the same day. That is consistent with the contemporary emails and I accept it. What I cannot accept is Mrs Krishan's total volte-face on this topic in her 2022 statement when she says it was the Claimant who was worried about a deadlock and wanted to transfer. This meant that the Claimant with 49% could no longer stop a sale.

238. The second stage was in November 2006 when the Claimant transferred all her remaining 49 shares to Mrs Krishan. Mr Rodgers explained that in the course of deciding whether to grant Gracefield a large overdraft, he undertook a credit check in accordance with bank policy on Gracefield's 'principals' - i.e. those with at least 25% of the shares. That revealed the Claimant's poor credit history - and indeed the fact she now had a CCJ on the wedding debt of £22,000 (which until then the Krishans had not been aware of at all). Mr Rodgers told Dr Krishan 'one of the principals' had poor credit history, but it would have been obvious that it was the Claimant. The practical effect of this - as I find Mr Rodgers explained to Dr Krishan at the time - was that whoever that was would have to reduce to a less than 25% shareholding. So, to secure the funding, it was only necessary for the Claimant to transfer 25 of her remaining 49 shares. Indeed, I note that Dr Krishan admitted he was told this '25% rule' at the time in his 2009 statement, although he said in evidence to me he only found out later 'principal' meant 25%, which I reject. The Claimant did not know the '25% rule' and I find Dr Krishan tricked her by asking her to transfer all of her shares, which she did, again demonstrating the extent of trust she had in them. Within two months, in January 2007, Dr Krishan also got the Claimant to agree to resign as a director. For the reasons at paragraph 220 and 229 above, as she never saw let alone signed the PSA, SB's 15^th March letter only entitled her to the first £300,000 on sale of the Properties and left everything else to Gracefield under control of its directors. However, by the start of 2007, the Krishans had not only taken over the Properties, they had successfully ousted the Claimant from Gracefield itself.

239. Shortly before the Claimant's resignation, this was recorded in the director's loan account in December 2006 crediting the Claimant another £200,000 for the Properties. It would have come as little use once she was no longer a director. Her ouster had also made it easier for the Krishans to execute a debenture over Gracefield in favour of the bank on 21^st December 2006 (although for a few more days a director, she was not told) for a £20,000 overdraft from Natwest, secured by a debenture over Gracefield and a personal guarantee from Dr Krishan. This enabled the Krishans from January 2007 to begin taking drawings from Gracefield. As I said at paragraph 100.2 above, a plain reading of the Balber Takhar Account in 2008 would suggest the Krishans had spent £556,000 out of their own bank accounts. However, it is telling that in the directors' loan account, their balance as at 30^th November 2006 was only £23,950. The vast majority of that was financial maintenance to the Claimant and arrears payments (though not including the £7,500 lump sum they would claim in the Balber Takhar Account). Gracefield's work in progress logs up to 30^th November 2006 prepared by SB show no expenditure at all on the Properties save the 'purchase price' of £100,000 and in December 2006, the extra £200,000 credited. Moreover, after the overdraft rose to £100,000 in June 2007, the Krishans drew £51,000 from the director's loan account in July 2007 and a further £41,000 from it in September 2007. So, by 30^th November, their director's loan account balance was only £733. By then they had ceased to pay the Claimant monthly maintenance of £400 in September 2007 (when rates on the Shops re-started). From the work in progress logs, the only expenditure on the Properties in the year up to November 2007 was £9,109 - most of which professionals' fees: no longer disputed as actually spent.

240. In fairness, that £9,109 paid to Mr Johnson and to other professionals such as Nolans (structural engineers), M Lathwood (Quantity Surveyor) and (with a caveat about the invoice), 'JS' the air quality and noise surveyor on the Cinema for example, was clearly money well-spent. Their work had enabled effective planning permission applications to be made on the Shops (for change of use to three residential properties), which had been granted on 19^th December 2006. The same date, Mr Johnson submitted planning permission applications for the Co-Op and the Cinema. The Co-Op was granted quickly on 21^st March 2007: for various works leading to a retail unit on the ground floor and residential accommodation on three floors. Nevertheless, I note despite that success, he still had to chase the Krishans for his fees in June 2007. Despite the Council's desire to see a resolution to the Cinema issue, it took them another six months until December 2007 to grant (assisted by JS' report) planning permission for demolition and the erection of three-storey residential accommodation.

241. At paragraph 105.1 above, I summarised why despite the difficulties in the clarity of Ms Dobsons' expert reports, that in the light of her helpful oral evidence, I accepted her 'pre-works valuations' for April 2006, of £890,000 in total (£450,000 for the Co-Op, £240,000 for the Shops and £200,000 for the Cinema). In short, they were corroborated by the Savills valuations in May 2007, instructed by Natwest due to the debenture lending, which said: 'Purchasers are paying a premium for derelict properties or properties in need of refurbishment, with or without planning consent'. However, I should elaborate on why I reached that conclusion on each of the Properties:

241.1 For the Cinema, whilst it was 'derelict', as the 2004 Survey obtained by the Claimant showed, it was structurally-sound. But it was an eyesore, which is why local people and councillors kept demanding that something be done about it. Even in 2003 (as I find), the valuation of £160,000 had assumed demolition and development. The value of the land lay in its location, size and potential, not the actual building itself. In June 2005, at the Bobby Takhar meeting, it was suggested the Cinema would 'offer a commercially-attractive proposition to a developer'. Leaving to one side the 2005 costings of Bobby's 'pipe dream' of a drama and literature centre, by January 2006, Donaldsons had estimated the costs of residential development as £606,000. Of course, it anticipated it would rise once fully-calculated (if not more than double as Mr Johnson's 2007 calculation did). The point is that in April 2006, the Cinema may have been an unattractive building, but it was an attractive development opportunity. If anything, Ms Dobson's valuation of £200,000 in April 2006 is surprisingly low given what she described herself about the market in 2006-07. £200,000 is certainly not over-inflated as a year later, with no maintenance so having deteriorated, Savills valued it at £450,000, anticipating planning permission later granted. As I noted at paragraph 119 above, I accept Bobby and the Claimant would have been prepared to sell the Cinema to keep the other Properties it and I will find later at paragraph 569 that it would have been sold by April 2006.

241.2 For the Co-Op, as Ms Dobson noted in her second report at para 31.3, the Barneveld Survey in 2003 had concluded that it was 'severely dilapidated' but the load-bearing and structural elements were in 'adequate condition' and once dried-out would be 'satisfactory', advising that the Co-Op would need 'stripping back' to its structural elements and starting afresh', estimating costs as £677,000 (or £400,000 for a 'much lower spec'). The same concerns had fed in the previous year to Coventry CC's valuation for rates of the Co-Op as £108,000 in its condition. In June 2005 Donaldsons concluded the Co-Op was not attractive to developers by itself, but might be as part of a 'package' with the Cinema. (The health centre route was also worth exploring, but that came to nothing in February 2006). In early 2006, Donaldsons had estimated development costs as £925,000, (again doubling in Mr Johnson's calculation in 2007 of £1,831,507). But, as Ms Dobson said in her first report at para.18.16, as a 'local landmark building', the most immediate return in April 2006 would have been commercial retail, as it always had been. Whilst that would have been contrary to the Claimant and Bobby's 'community use' ideas, notably the Co-Op's buyers in 2011 refurbished it as a shop and let it out. That was the 'commercial' option with the Co-Op - indeed even Mr Johnson's expensive 2007 costings for flats above envisaged a shop on the ground floor. In any event, in May 2007, Savills' valued the Co-Op at £425,000 with planning permission, but also noted developers were paying a premium even for derelict properties without planning permission and this value was on a loan security basis which Ms Dobson observes decreases a valuation. Therefore, I accept her expert opinion that on an open market valuation in April 2006, even without planning permission, those same enthusiastic developers would have been prepared to pay £450,000. In any event, even if that is slightly on the high side, given Ms Dobson's Cinema valuation was surprisingly low, on the balance of probabilities their combined value was at least £650,000.

241.3 There was less said and to be said on the Shops. Ms Dobson's basic point in her first report at paras.18.24-25 was that they were three separate properties but as they had once been joined (even though they were not anymore), they were treated by everyone as one property, which depressed the prices which could have been fetched individually. In short, everyone always treated the Shops as a 'job lot' even though they did not have to be, so their valuation was lower than they needed to be. That was particularly true as it was only 558 that was structurally-unsound. I accept Ms Dobson's opinion that 'lumping in' 554 and 556 with it reduced Savills' valuation substantially (especially on a loan-security basis) to £210,000 even with planning permission. By comparison, in Ms Dobson's report she noted that (doubtless better-condition) four different terraced properties between 505 and 655 Foleshill Road sold in 2005-06, fetching an average of £127,000. I accept in the buoyant market of April 2006, if the three Shops had been valued individually, their total value would have been at least £240,000.

So, even if Ms Dobson's valuation for the Cinema was on the low side and for the Co-Op was on the high side, I accept her total for April 2006 of £890,000.

242. Whilst I accept Ms Dobson's expert (and Savills' contemporaneous) opinion that in the 'hot market' of 2006-07, actually getting planning permission added relatively little to the 'pre-works' value of development opportunity properties even if derelict or in poor repair, it is clear from Savills' assumed 'post works' valuations of the land once developed as 'unlocked' by planning permission were much higher. Whilst this did not really apply to the Shops (which were to be re-converted to homes, not 'developed'), it certainly did to the Cinema, where Savills 'pre-works' valuation of £450,000 rose to its 'post-works valuation' of £1,905,000; and on the Co-Op where Savills' 'pre-works' valuation of £425,000 rose to its 'post-works' valuation of £1,572,000. In both cases, on the 2006 Donaldsons refurbishment estimates of £606,000 for the Cinema and £925,000 for the Co-Op, the potential profit on the Cinema alone could approach £1.3 million, with the Co-Op adding up to £650,000 potential profit. So, in June 2005, it was the Cinema which Donaldsons considered the best opportunity, not the Co-Op, for all its local history. I find those potential 'post works values' in 2007, while not calculated for 2006, buttress Ms Dobson's April 2006 pre-works valuations of £890,000. On the Savills 2007 valuations and the Donaldsons' 2006 costings, the profits one could expect from development and sale of the Properties (assuming the Shops were broadly cost-neutral) would approach £2 million.

243. However, by the time of the Savills' valuations in May 2007, Mr Johnson in his January 2007 'Indicative Budget Cost Estimate' had actually fully assessed the refurbishment costs of the development (which appears to have changed in specification and so doubled in cost from what Donaldsons estimated). That meant, on Savills' post-works valuations of the Co-Op as £1,572,000 but Mr Johnson's much higher costs of £1,831,507, developing the Co-Op would actually make a loss of c.£260,000. On Savills' post-works valuation of the Cinema of £1,905,000 but Mr Johnson's costs of £1,434,484, its profit would only be c.£470,500, not much different from their 'pre-works' valuation of £450,000 which would not require them to spend anything. Again assuming the Shops were broadly cost-neutral, the Krishans would make much better profits if they simply sold the Properties as they were at Savills' pre-works valuations of c.£1,085,000.

244. Therefore, by mid-2007, the Krishans would have realised that a quick sale of the Properties as they then were would generate an extremely good financial return for them. They had spent effectively no money on the Properties themselves (and what little money they had spent on those and maintaining the Claimant was largely refunded by the overdraft by November 2007). They not had undertaken any maintenance - Bobby had done that done for free at the Shops in April 2006 and again in late 2007 on the Co-Op. Moreover, it now suited them that there was no signed PSA for the Claimant to receive 50% of the profit share, as they knew she had last been told by SB on 15^th March 2006 that she would receive (only) £300,000 in total on a sale. So, the Krishans might make c.£700,000 at little cost.

245. No wonder the Krishans felt they had many reasons to celebrate in September 2007 at the opening of their new health centre. From photographs, the Claimant attended and briefly met various people, including Mr Johnson and Mrs Davies, I accept her evidence at this stage the Claimant was 'gushing' about the Krishans' help whom she still trusted implicitly. But I do not accept she mentioned a 50% profit share. I have found as a fact it was never mentioned to the Claimant. Mrs Davies may have got that information from her husband who had been told by the Krishans when the dispute arose in 2008. I accept and find as a fact on balance of probabilities the Claimant never even saw, let alone signed, the draft PSA.

The Dispute, Litigation and Sale of the Properties: 2008-2014

246. As 2007 turned into 2008, whilst the Krishans' plans of developing the Properties seemed to have ended, they looked forward to high returns from sale. As noted, on 7^th December 2007, planning permission was granted on the Cinema. Whilst Dr Krishan says Natwest were pressing for repayment of the overdraft, from the chronology, the bank increased it to £125,000 in January 2008 and to £150,000 in March 2008. By then, I will find the Krishans had decided to sell the Properties through auction with Loveitts, precipitating a dispute with the Claimant in March and eventually litigation by October 2008. This then concluded in July 2010, with the Co-Op and Shops sold in March 2011 for £675,000 and £175,000 respectively and the Cinema sold in August 2014 for £191,000.

247. I have already covered in my assessment of the evidence earlier many key points about 2008 - indeed finding in several respects the Krishans' evidence about it was seriously unreliable. Moreover, at the start of this judgment, I also detailed a full procedural history. However, given the findings of fact from 2008 to 2014 relate to the conspiracy claim as it has now narrowed, I will need to focus in on a little detail (although not as much as for 2005/06) on five particular aspects of the period from 2008-2014: (i) how the dispute developed in 2008, (ii) its progress to litigation in October 2008; (iii) how and when the Krishans forged the PSA (which I can take in significant part from the binding findings in the Gasztowicz Judgment with a little supplementation given the new disclosure); (iv) how the Krishans deployed the PSA and other false evidence in the litigation and its mixed fate in the Purle Judgment in 2010 (again, which I can largely but not entirely take from the Gasztowicz Judgment); and (v) the sale of the Properties in 2011/14.

248. Gracefield's bank account from 2006 to 2010 eventually incurred an overdraft of £181,661.98. As discussed at paragraph 239, whilst the Krishans had incurred expenditure themselves, by November 2007 they had paid themselves back using the overdraft so they were only owed £733 in their directors' loan accounts with Gracefield and they had ceased to pay the Claimant maintenance. Whilst they did still use their own funds, so that by February 2008 they were owed £19,583 but in April 2008, £20,000 was paid to Dr Krishan, again using that overdraft. Given its size, it is not surprising that between 2006 and June 2010, Gracefield incurred bank interest and charges of £49,116.68 and that total was not challenged when Dr Krishan was cross-examined. However, he appears to have double-counted in that schedule the £19,582.35 in bank charges which forms part of the £132,084.83 in expenditure which Mr Johnson showed was incurred from 2006 to June 2010.

249. At the start of 2008, by then it had become apparent to the Krishans that they would get better returns selling the Properties as they were than by developing them, as most of the 'development uplift' as assessed by Savills in May 2007 would be swallowed up by the very high development costs, at least as Mr Johnson had assessed them in 2007. Therefore, once the Cinema obtained planning permission in December 2007, it was wise to sell the Properties. Indeed, Ms Dobson's report at paras.16.1-2 details how the market turned from boom in 2007 to bust in 2008. As she said (and frankly I can clearly remember) the fact that by the end of 2007, the 'Northern Rock Crisis' had first publicly revealed in the UK the emerging 'Credit Crunch' which had started in the US. The Krishans were astute enough to know that they should sell the Properties and sell quickly. Indeed, at other points of her report Ms Dobson herself says that the best time to sell was 2007. Certainly, by the time the Krishans met Mr Matthews in June 2008 (as I detail below), he agreed with them the Properties should be sold then - if they were to be sold (although he knew the Claimant did not want to sell - showing her attachment to them). Therefore, with the New Year, the Krishans pressed forward with their new plans to sell the Properties. On 27^th February 2008, nine months after their previous valuation, Savills re-affirmed their valuations of the Cinema (which had already factored-in planning permission which was now actually granted) as £450,000 and slightly increased its valuation of the Co-Op to £430,000 (from £425,000). This was done in the context of a 'Marketing Report' for the sale of the Properties. I note that Savills tendered services on the basis of marketed sale, not auction.

250. However, in fact, Loveitts were instructed to auction the Co-Op, then the Cinema. Mrs Krishan says it was the Claimant's suggestion. Dr Krishan does not mention that - he said that the Claimant agreed the Properties should be sold and then he had the Properties valued by Loveitts. Mrs Smith from Loveitts remembers him. The Claimant for her part is adamant that she knew nothing about the sales until 17^th March 2008, when she happened to be in Coventry going to the Register Office for a copy of Arun's birth certificate, drove past the Co-Op and saw an 'For Sale' sign outside it for an auction on 14^th May. She vividly described in evidence her shock. After going to the Register Office, she drove past the other Properties and saw the same sign outside the Shops but not outside the Cinema. She was upset and called Bobby, who also remembered that same day clearly. I accept the Claimant's account on the balance of probabilities for three reasons:

250.1 Firstly, as I found in my assessment of the evidence when discussing the parties' respective credibility, it beggars belief (especially in the light of the findings I have made since) that Dr Krishan would defer to the Claimant (whom Mr Rodgers recalls him describing to him as having 'no business acumen'), as Mrs Krishan claimed. Dr Krishan does not mention it. Indeed, Ms Smith from Loveitts does not even refer to the Claimant at all.

250.2 Secondly, whilst it was suggested Mrs Krishan's account was supported and the Claimant's account undermined by contemporary documentation, the contrary is true. It was suggested the Claimant and Bobby's evidence that she saw the 'For Sale' sign on 17^th March must be wrong, as Loveitts' auction agreement was dated 25^th March. However, that agreement relates to the Cinema only. Moreover, a Loveitts compliments slip sending that agreement to Dr Krishan (presumably on or around 25^th March 2008) refers to 'another offer on the Co-Op', showing it had already been advertised for long enough to have at least two offers - consistent with the Claimant's case that the Co-Op was advertised earlier (before 25^th March) than the Cinema, corroborating her account. So too does Mr Matthews' note of 31^st March recording her discussing her discovery (that I discuss in a moment).

250.3 Thirdly, as also said above, the Claimant's vivid and detailed recollection of discovering the auction when she drove past and saw the sign stands in total contrast to her dismissive answers about practical matters she did not care about, like meetings with professionals. Of course, I have found that in late March after SB's letter, due to Mrs Krishan's reiteration of the 'rescue narrative', the Claimant acquiesced to the plan to sell the Properties. However, she never agreed to be 'cut out the loop'. Her shock is also corroborated by Bobby's own vivid memories and those of Mrs Har Hari.

251. Indeed, on discussing what had happened with the Claimant, Mrs Har Hari recommended that she take advice from Mrs Har Hari's own financial adviser, Mr Matthews, whom I found an impressive witness, corroborated by his contemporary notes. The Claimant contacted him after she tried and failed to get hold of Mrs Krishan. Mr Matthews recalled that having been introduced by Mrs Har Hari, he met the Claimant for the first time on 31^st March 2008 and took a note of that. It recorded the Claimant describing being gifted the properties about 9 years before (i.e. 1999/2000), that they were empty and in need of repair and had rates and costs to be paid as she was on benefits. She explained (still not realising at that stage what had in fact happened) that in 2005 her cousins offered to help for family reasons not profit by transferring Properties into a company to 'cover overheads, renovate and let'. The note does not record mention of compulsory purchase, but Mr Matthews was clear in evidence that he recalled it was mentioned as the Claimant thought the Properties could be subject to CPO without fair compensation, which he knew was wrong. However, the note did not record it as it was just an overview, not investigation of fraud at that stage. I accept Mr Matthews' evidence which also fits my findings. The Claimant went on to tell Mr Matthews (as I noted above) that she had found out the Properties were due to be auctioned in May 2008 which she had not been consulted about and sale was not what they had agreed. He told her to tell the Krishans to stop the sale.

252. It is not disputed that this is what the Claimant did - she and Bobby invited the Krishans, once they had returned from holiday, to her home on 5^th April 2008. The Claimant said (and I accept) that during the meal she had cooked them, she told them she had found out about the auction, had spoken with Mr Matthews and suggested they and she meet him to get advice. Mrs Krishan apologised for not communicating, but tried to persuade the Claimant that selling the Properties was a good idea. However, the Claimant made clear that she did not want the Properties sold and it was agreed that the Co-Op would be removed from the auctions. The next day, the Krishans instructed Loveitts on 6^th April to stop the auctions. I consider this point - April 2008 - the crucial turning-point in the dealings between the Claimant and the Krishans. She had previously trusted them implicitly - initially Mrs Krishan for emotional support and then her and Dr Krishan for support financially and practically with the Properties. Indeed, she had been very grateful for their help - as she told people like Mrs Davies in 2007 and even Mr Matthews at the first meeting in March 2008. However, given what had happened, now the Claimant was angry with the Krishans, not simply for failing to consult her, but in deliberately planning to sell the Properties when she had never agreed that. For their part, whilst the Krishans pulled the auction, they knew that they needed to sell and sell quickly.

253. Therefore, the Krishans decided to try and persuade the Claimant to agree to selling the Properties. Strictly speaking of course, Gracefield legally owned the Properties and they owned Gracefield, so they could have ploughed ahead regardless. However, in 2005/06, they had told the Claimant the Properties would really still belong to her and they must have known that ploughing ahead might open a can of worms about the transfers. They had cajoled and pressured the Claimant then and I find that is just what they decided to do again. Therefore, they invited the Claimant and Bobby to their home to discuss the Properties on 30^th April. In turn the Claimant says that she asked them to have the invoices for their spending on the Properties ready. However, beforehand, they decided to put their case to sell to the Claimant as strongly as they could and once again, to exaggerate to do it. So, they prepared the 'Balber Takhar Account'.

254. As I noted at paragraph 100 above (and as both HHJ Purle QC and Mr Gasztowicz QC found before me), the Original Balber Takhar Account is a misleading document. It starts reasonably enough, with an accurate list of the initial £5000 cheque for the Claimant's credit cards and monthly payments of £400 from December 2005 to August 2007 (with £200 in September 2007). There is no dispute the Krishans paid the Claimant £13,800, which is essentially the same as the list of payments to her on the Balber Takhar Account. That is not surprising: the Claimant would know full well how much they paid her. However, as I noted earlier, when it came to paying others, the Original Balber Takhar Account started radically diverging from reality. It suggested the Krishans had paid Coventry CC from 2005 to May 2008 a total of Council Tax and Rates of £28,500. Whilst the Balber Takhar Account says 'outstanding rates on Ritz and Co-Op also cleared', given there is no evidence of rates being charged on these, I do not accept that. On the Shops, the letter from Coventry CC from 2014 confirms the position for rates and Council Tax from 2006 (it missed a couple of payments in Autumn 2005) to 2010. No rates were levied on 554-556 Foleshill Road in the period and no Council Tax was charged at all from June 2009, when Bobby Takhar started paying. The total paid on both on the Shops from 2006 to 2010 was £2,190.18 on 554 Foleshill Road and £2,191.25 on each of 556 and 558 Foleshill Road, a grand total by my calculation of £6,572.68 (rather than the £5,672 the Claimant accepts, but I am prepared to accept the higher figure). Therefore, the Original Balber Takhar Account over-estimated the amount spent on Council Tax and Rates on the Properties by over four times. So, their future estimate of annual rates on all the Properties of £42,000 was a massive over-estimate too.

255. However, all that simply pales in comparison with what was said at the bottom of the first page and top of the second about other costs, which given its significance (and how it later changed) I set out in full (my italics):

"In addition, all bills and liabilities paid for management, authorisation, architects, quantity surveyors, structural engineers, planning applications, designs, air and noise surveys etc. Currently out of Premier and Private accounts £556,000 plus two more current bills outstanding to Structural Engineers for further work of approx. £2,000 and £7,600 to Loveitts for marketing purposes. Total so far: £565,600. Further work being done by Architects, Quantitty Surveyors, Engineers and Planners being done to ascertain feasibility and current costs as of today of developing sites."

The clear implication made by this document was that (i) total costs expended so far were £565,600; and (ii) that £556,000 of that had come 'out of Premier and Private accounts' - namely the Krishans' own bank accounts. That was miles from the truth. As I found, on Gracefield's own work-in-progress logs prepared as part of their accounts by SB: up to November 2006, nothing was incurred other than £100,000 nominally in the directors loan account to the Claimant for the Properties; whilst in the year to November 2007, £9,109 was incurred (mostly on Mr Johnson). If one goes to the same log up to November 2008 (prepared once the litigation had started), excluding Dr Krishan's spurious 'management fee' I discuss below and the £300,000 in the accounts for the 'cost' of the Properties, the costs in total from 2006 to 2008 were £91,808.18, less than a fifth of what was represented. Moreover, as found above, from the Krishans' own directors loan accounts based on information they supplied SB themselves as Gracefield's directors, as at November 2006, they were owed by it £23,950 and as at November 2007 (after they arranged the overdraft a year earlier and extended it), they were owed by Gracefield £733. In April 2008, the date they prepared the Original Balber Takhar Account, the director's loan account suggests they transferred themselves £20,000 and effectively were owed nothing (indeed by November 2008, their loan account was in the red).

256. After the findings in the Purle and Gasztowicz Judgments had 'highlighted' this issue, the Krishans before me desperately tried to explain this all away as a typo by Dr Krishan, as 'Currently out of Premier and Private accounts' [full stop] £556,000 plus two more current bills outstanding." This is plainly nonsense. To start with, 'Currently out of Premier and Private Accounts' alone would make no sense - and they put it on a different line than the previous expenditure (which is not counted up) and the costs were never anywhere near £556,000. Alternatively, they suggested that they meant but did not clearly state that £556,000 was the amount they expected to realise from the sale (what they had told Mr Gasztowicz QC). But, as he found (and I agree) there is no reference to that (or any valuation of the Properties which would explain it) anywhere in this document, which is all about 'costs'. It would make no sense to 'sandwich' an unexplained profit between a list of costs. I find on the balance of probabilities the Krishans concocted this document. I agree with Mr Gasztowicz QC that the document was 'demonstrably untrue' and with HHJ Purle QC this was done to 'get the Claimant off the fence' and to agree to the sale of the Properties.

257. Unsurprisingly, when the Original Balber Takhar Account (with some invoices I will come to in a moment) was handed to the Claimant and Bobby by the Krishans when they visited on 30^th April they were in shock at the levels of cost. The Krishan' plan was to persuade the Claimant that the costs were so high that it would be better to sell or at least continue development. I find their underlying plan had not changed - as the financial crisis snowballed in Spring 2008, they must have known property prices would fall. Certainly, despite all the talk of costs (and future costs), I find the Krishans knew it would be much better to sell than develop, but they had seen on 5^th April that the Claimant did not want to sell. The critical thing was to 'keep her on board', rather than 'opening up the can of worms' of 2005/06 (if I may be permitted the mixed metaphors). The Balber Takhar Account was intended to inflate the costs to achieve just that. This is why they presented it to the Claimant and Bobby when they visited.

258. However, the Krishans' plan backfired. On 30^th April, the Claimant was horrified at how much had been spent and told them not to spend any more on the Properties, as she could not afford to pay them back what they had spent already. (This suggests she considered herself still their 'owner'). Immediately, the Claimant sent Mr Matthews the Balber Takhar account and a collection of invoices she and Bobby were given, including I find the 'JS Invoice' of 14^th June 2007 (reference JS/1/2007/RGA1). As I will explain, that differed from another copy of the same invoice with the same reference only totalling £6,010.13. This first invoice totalled £39,045.25, by someone adding a '2' to the start of £3,505 for the Air Quality Assessment of 11^th June so it was now £23,505 and adding a '1' to the start of the next three items, inflating them by £1,000 each. The Krishans accepted this higher invoice was forged but both denied it was them. Dr Krishan even suggested the Claimant had forged it to implicate them, but again, this is nonsense. The Claimant sent it to Mr Matthews who considered it 'amateurish' without a proper heading. However, the inherent improbability of forgery is reduced by the Krishans' later forgery of the PSA copy: Arkhangelsky. I find on the balance of probabilities the Krishans forged the JS Invoice to pretend it was a revised invoice with substantially inflated costs, chiming with their approach in the Original Balber Takhar Account.

259. By May 2008, the Claimant was starting actively to suspect the Krishans of underhand tactics. Therefore, she decided to try and get evidence to prove her suspicions and for Mr Matthews. That is why when the Claimant called Mrs Krishan on 19^th May 2008 - twice - she recorded it both times. This was not accidental at first on her mobile phone as she drove as she suggested. I found she lied about why she did this as she did not want to be criticised for doing it deliberately, although she freely accepted that she recorded the second and third calls deliberately. Giving myself a Lucas direction, I accept this minor lie does not undermine her other evidence, though I bear it in mind. However, as I said I have found the actual transcripts very revealing and useful. I have set out the material passages above in my assessment of the evidence. But it is helpful to summarise them briefly in their proper place in the timeline of events. In the calls on 19^th May 2008, when Mrs Krishan was at work, she still did most of the talking, in response to the Claimant's repeated concerns (stemming from the Balber Takhar Account) they were spending far too much on the Properties.

260. As quoted at paragraph 121 above, Mrs Krishan responded that the Properties in 2005/06 had been 'worthless', the Claimant had at that time risked bankruptcy, that the Krishans had and were helping her as family to save the Properties from Ian, that they derived no benefit themselves, but had spent £500,000 in developing them. Now placed in the context of what was actually happening when those calls were made, it is clear that Mrs Krishan was returning to - and reminding the Claimant of - 'the rescue narrative' she and Dr Krishan had fed her in 2005/06: e.g. the 'worthlessness' of the Properties, the risk of bankruptcy and how they were trying to help her not helping themselves. I have found these were wrong in 2005-06 (but not yet made findings on their fraudulence) and they were certainly wrong - and I find deliberately misleading - in 2008. It is clear that this was part of the Krishans' plan to 'keep the Claimant 'on board'.

261. The key passage of the 19^th May calls at the time was Mrs Krishan saying:

"[W]e have got another six months at least of this, all right and then you know we should be able to sort of move forward, all right. These things just take time, you know, but I looked at them yesterday and I thought there is no way my sister is actually going to get caught up in the hands of Inderjit ['Ian'] because I know how you feel and I don't want anybody associated with him tackling it because you know what they'll do, they'll sub let it to him or they'll give it further on to him, and I am not having that. I think - I don't know why but it's a question of family honour, almost."

262. However, this time, the Claimant was not taken in, even by the 'emotional button-pressing' by invoking family honour and the risk of Ian 'getting his hands on' the Properties. The Claimant insisted on a meeting with Mr Matthews on 9^th June and the Krishans reluctantly agreed. They knew that they would not be able to cajole the Claimant so easily with an independent professional there. They also knew that they should not continue to rely on the forged JS Invoice and decided to hand over the original totalling £6,010.13 in case he wanted to go through the records. However, otherwise they decided to throw everything at their attempts to keep the Claimant 'on board', or even agree to a sale. Persuasion and cajoling was not working as it worked in 2005/06. Therefore, they went back to their computer - always an integral part of their schemes and produced 'Options for Gracefield'.

263. That document, as discussed above at paragraph 100, was found by both HHJ Purle QC and Mr Gasztowicz QC to be misleading. Once again, on the evidence I have heard and reaching my own view, on the balance of probabilities I agree and indeed find that 'Options for Gracefield' was intentionally misleading. As I noted earlier, like the 'Balber Takhar Account' it incorrectly stated the development had 'incurred huge costs. Most of these had been met by us personally'. As I have explained, this was misleading as by November 2007, the Krishans had effectively if not entirely been repaid. Moreover, it added 'Shortly there will also be a £60,000 Corporation Tax Bill' which is wrong and I reject Dr Krishan's excuse he meant Capital Gains Tax. As Mr Graham says, it is true that in other respects the document could be said to be factually accurate, save for one

Dr Krishan accepted that was wrong. Notably, with Mr Matthews there, it was not suggested CPOs had been made, as that could be easily checked. However, it was suggested 'she would have received nothing whatsoever in return' - a reiteration of what they had told the Claimant back in 2005-06. However, it was now part of their new plan to convince the Claimant to sell the Properties.

264. In order to do that, the 'Options for Gracefield' document set out four supposed 'options' which in fact were clearly a 'steer towards sale':

264.1 The fourth was not an 'option': it was the Krishans saying they no longer wanted to develop the Properties due to 'interference'. In fact, they no longer wanted to develop the Properties as it was not cost-effective.

264.2 The third and second 'options' were really two sides of the same coin, especially as the document had stressed that 'time was ticking' as the planning permissions would lapse after three years (not specified but in fact December 2009 on the Shops, April 2010 on the Co-Op, December 2010 on the Cinema). The 'options' were that the Claimant pay all their costs and expenses to date (hence the inflated Balber Takhar Account) and the Krishans withdraw their management and the next 'option' - really being the next step in that same option - that the Claimant find a partner to develop the sites. The Krishans knew full well - not least as the Claimant had already told them on 5^th April - that she could not afford to pay them the inflated costs in the Balber Takhar Account. The Krishans also knew that the Claimant would have no interest in developing the Properties - and although Bobby might, they doubted it and at least they got £500,000.

264.3 However, the Krishans' real objective was 'option 1':

"The properties be sold through auction as originally planned but will now yield a lower return."

Indeed, when they presented 'Options for Gracefield' to Mr Matthews at the meeting on 9^th June, he agreed with the Krishans' preferred option of sale. In his own note, Mr Matthews accepted he that 'in the current financial climate a developer would sell fast before the market collapses and probably sell at an auction' as the Krishans had planned. In evidence he accepted that was true if the Properties were to be sold, but the Claimant did not want to sell and it was fair to keep them until the market recovered.

265. In any event, Mr Matthews' purpose for the meeting was not a general discussion. He already had concerning information and it was now exacerbated by another copy of what appeared to be the same 'amateurish' invoice but now with completely different figures on it. Moreover, he could immediately tell 'Options for Gracefield' included inaccuracies and possible lies - like under compulsory purchase the Claimant would have got 'nothing whatsoever in return', which the Krishans also reiterated to him at the meeting. He did not challenge that or the documents, as his purpose was to investigate the Krishans, not to challenge them. Indeed, when he gently probed about the initial transfer and tax implications they did not answer the questions. Moreover, when he queried the £500,000 costs in the Balber Takhar Account by suggesting they had 'inadvertently placed additional costs in the spreadsheet', they denied it, 'the mood changed' and he 'decided to wind up the meeting without pressing any further'.

266. After that meeting, it was clear to Mr Matthews and he told the Claimant that it was likely the Krishans had defrauded her and that she should get some legal and accountancy advice. Whilst he had become involved to see if he could assist the Claimant to develop the Properties, which having seen them from the outside he considered still viable, given the suspected fraud, clearly there was no longer any role for him (except as perhaps the only entirely reliable witness I had) in what would clearly become a 'legal wrangle'. It is striking that Mr Matthews' initial intuition even at that stage that 'something did not seem right' - and his perceptive analysis of the problems with the various documents from the Krishans from April-June - Mr Matthews was proved right about the legal wrangle too. However, before getting to that, there were a few last issues.

267. On 25^th June 2008, a few weeks after the difficult meeting with Mr Matthews, doubtless still under pressure from councillors, Coventry CC finally ran out of patience with the Cinema. They wrote to the Claimant warning her under s.215 Town and Country Planning Act 1990 (as discussed above, a planning power, not compulsory purchase one) that she must either demolish or come up with 'a substantial package of proposals to tidy up the building' within 28 days, otherwise the Council could issue a formal notice requiring her to do so, breach of which could result in prosecution - notably, not 'prison' as the Krishans had said back in 2005/06) and/or undertake the work itself and charge her for it. This was also sent to Mr Johnson, who emailed Dr Krishan on 28^th June. He said given the local pressure, he felt the Council's threat was real and could lead to 'compulsory purchase of the site'. That is true, but not the same as saying CPOs were even 'likely'. Nevertheless, in mid-2008, the situation was getting serious.

268. This is the context for the last call the Claimant covertly recorded on 30^th June. As I observed in my assessment of the evidence earlier, the tone of the call was different from those on 19^th May (before the Matthews meeting as well as the Council's letter). Consistently with 'Options for Gracefield', Mrs Krishan said if the Claimant was not happy with what they had done, she could deal with it:

[Mrs Krishan] "I mean we did say it was going to be 50/50 on everything we did." [The Claimant] "Yes] [Mrs Krishan] Right, so whatever the values are now, you know I mean is you are willing to sort of pay us off then we are quite happy with that."

I have dealt with that already, but add that whilst the Claimant acknowledged 50/50, by this stage, Mr Matthews had told her he suspected fraud and she should get lawyers and the Claimant was 'gathering more evidence'. Yet it is a testament to the importance she even now placed on her relationship with Mrs Krishan that the Claimant had not yet sued. Otherwise Mrs Krishan repeated her themes from the earlier calls, talking about the letter from Coventry CC about the Cinema sent to the Claimant not to Gracefield as 'although we are handling it the property is yours'. However, Mrs Krishan linked back the Council's letter about planning to the (different) question of Compulsory Purchase Orders ('CPO's):

"[Claimant] I have been very appreciative...[Mrs Krishan] Really, when the first lot of CPO orders came, maybe, you know, it would have been better had we not done anything and they had just been taken off, and it would have left you absolutely nothing." [At the end, just as the Claimant was saying goodbye, Mrs Krishan added]: "[W]e are still sort of going back to the stage where we are saddled with CPOs and everything else again."

269. A few days later (in fairness, not a month as the Claimant says in her statement), on 4^th July 2008, the Claimant visited the Krishans uninvited (as she may well have done before, but in a very different context). In short, it was a difficult meeting where the Claimant and the Krishans argued - perhaps for the first time. As a result, the Claimant tried one last time with a handwritten letter on 7^th July. It was a concillatory letter which went back to the re-kindling of their relationship 'at a low ebb in her life', how she confided in Mrs Krishan and how they supported her financially and the Properties, but how she could not expect the Krishans to carry on supporting her, so if they let her know the cash incurred to date, she would reimburse them. Mrs Krishan herself did not respond.

270. Instead, on 14^th July, Dr Krishan tried one last time too, albeit in a very different way. He wrote to the Claimant to say that she had not given them a decision (in fact she had done in her letter). He added that Coventry CC's concerns could lead to prosecutions and CPOs. This was either a little slip forgetting that in 2005 /06 they had told the Claimant there were CPOs, or simply part of their ongoing narrative that they would and now had 'saved' the Properties from CPOs in some way. Indeed, I accept after transfer the Krishans had briefly suggested to the Claimant they had instructed solicitors to do so. Dr Krishan repeated what they had said in 'Options for Gracefield': that they were no longer prepared to develop the Properties. He suggested she could, but she would have to buy them at their current market value (a slightly different tack than repaying their costs which by then they knew Mr Matthews suspected, but obviously equally deliberately unrealistic). Dr Krishan ended by saying that if the Claimant did not buy the Properties on that basis within 28 days, the Krishans would have no option but to sell them. In fact, that had been their plan since they realised development was uneconomic in late 2007. But they thought it was worth one last application of pressure to see if the Claimant would agree so they could achieve their goal.

271. This letter from Dr Krishan on 14^th July was the last straw for the Claimant and she finally instructed solicitors - as I said Challinors. I have already explained their first pre-action letter of 24^th July 2008 on her behalf to the Krishans does not set out the 'stick' part of their 'rescue narrative' in 2005/06. I have taken that into account finding the Claimant was mistaken in saying the Krishans told her CPOs had actually been made in 2005 rather than 2006 given SB's notes. However, at this stage Challinors were still investigating the CPO position with Coventry CC and this point was addressed one they had heard back in their letter of 24^th October. However, the 'carrot' side of 'the rescue narrative' is set out in detail in the 24^th July letter and described as a 'campaign'. On my findings, especially when taken with the 'stick' side, that is a reasonably fair description. Tellingly (as the Claimant later pleaded in her professional negligence counterclaim against them), in this very first letter, Challinors on her behalf alleged fraud. They set out a case principally based on Gracefield holding the Properties on trust for the Claimant but also effectively of undue influence, but it is not explicitly mentioned. What is mentioned - and I return to at the very end of this judgment - is the Claimant's proposal to 'provide recompense for reasonable expenditure on the Properties'. Lastly, the Krishans were invited to undertake not to deal with the Properties, to avoid the need for an application for an injunction.

272. The Krishans promptly instructed a firm of solicitors. Although they did nothing wrong whatsoever, in the circumstances I simply will refer to them as 'H' and the solicitor with conduct as 'J'. It appears that SB was also involved as she met the Krishans on 4^th August and on 7^th August emailed J and her assistant a PDF of various documents the Krishans had given her. This included not only Challinors' letter before claim, but also a statement prepared by Mrs Krishan setting out her account of the transfers, including an agreement to pay the Claimant £300,000 and 50% of the profits on sale, but without any reference to either her or them signing a PSA. It also included an unsigned copy of the 'Whiston letter' of 24^th March 2006 which I found Mrs Krishan had drafted (and the 4^th July 2005 letter), 'Options for Gracefield' and an edited version of the 'Balber Takhar Account'.

273. Having first met the Krishans on 26^th August 2008, the next day J contacted SB's colleague SR. From J's file note, SR had SB's letters of 15^th March 2006 (not 2008 as recorded) to the Claimant and to Mr Whiston. Despite the headings of those letters, SR also confirmed they had not acted for the Claimant (Mr Whiston later told Challinors he had not acted for her either and declined their request for a copy of his file). SR also referred to a copy of a profit share agreement dated 1^st April 2006 which had been 'handed to the client'. Given they did not act for the Claimant, that would have been a reference to Dr Krishan, as he accepted. Importantly, SR confirmed at as of 27^th August 2008, there was no signed copy of the PSA on their file. SR emailed those documents, including the unsigned PSA noting that SR/SB had no record of it being signed and returned. Again, from disclosure from H's file, it appears that J emailed the Krishans that day to ask them what happened to the PSA. Mrs Krishan responded briefly:

"The profit agreement is as in the agreement [i.e. a reference to what she had told J as recorded in the earlier note]. As to what happened to it, I am not sure but it was in the 2005 and 2006 that it was agreed." (my underline)

J responded by asking whether the PSA had been signed, Mrs Krishan replied:

"As far as we know the agreement was signed. Not sure where it is or who has copies."

Therefore, as at 27^th August 2008, the Krishans suggested 'as far as they know the agreement was signed': not that they had signed and returned it in 2006 and had heard from Linda Hunt or anyone else that the Claimant had done so. Indeed, I find J's email prompted them to recall the written PSA that they had almost forgotten about and to dig out their (unsigned) copy to consider it. I will return to that. The next step was that on 28^th August 2008, J received a fax from Mr Whiston enclosing a copy of various correspondence including the 'Whiston letter' signed by the Claimant and dated 24^th March 2006 found in the Gasztowicz Judgment to have been used in forging the Claimant's signature on the PSA.

274. On 28^th August, J responded in detail to Challinors. That set out much of the chronology in dealings with professionals that I have detailed, including the meetings with SB. It also enclosed a copy of the 24^th March 2006 signed 'Whiston letter'. J's letter also said that in 2005, it was the Claimant who said Coventry CC were threatening CPOs (the first mention in the legal correspondence, in fact). The basis of the Krishans' agreement was set out in accordance with the Krishans' instructions, although interestingly, it suggests the agreement was the Claimant would receive the first £60,000 of any sale proceeds from the Cinema, £80,000 from the Co-Op and £20,000 each in respect of the three Shops. Those figures, totalling £200,000, are taken from SB's letter to the Claimant of 15^th March 2006 which J had been sent by SR, although it did not specify a further split and did not actually mention the payment of the £100,000 'purchase price'. J offered the Krishans' undertaking not to deal with the Properties. As one might expect of an initial response, I find on balance of probabilities J sent the Krishans a copy of this letter and its enclosures, including the signed copy of the Whiston letter.

275. Following the warning in June 2008, on 19^th September 2008, Coventry CC issued a formal notice under s.215 of the Town and Country Planning Act 1990 (the planning, not compulsory purchase power) requiring Gracefield either to demolish or undertake maintenance and cleaning to the Cinema by 27^th October. Coventry CC's letter of 22^nd September to Gracefield urged compliance with it. Indeed, in October, Coventry CC also warned s.215 improvement notices on the Shops on 17^th October 2008 and issued a formal notice on the Co-Op on 20^th October. This was the first formal action on the Properties, for which Gracefield had been responsible for over 2½ years yet undertaken no improvements (save Bobby's efforts in tidying them up). But these were planning notices, not CPOs.

276. At the same time, Coventry CC were also corresponding with Challinors. On 30^th October 2008 they confirmed the planning notices on the Properties. However, before that on 3^rd October 2008 Coventry CC confirmed the Co-Op was taken out of business rates in 1998 and there were no outstanding arrears on it. They would later on 28^th November confirm the same for the Cinema and the rates for the Shops on an 'empty' basis for 2005/06, 2006/07, 2007/08 and 2008/09. Back on 10^th October 2008, Coventry CC also confirmed there were no CPOs on any of the Properties and on 23^rd October, Mr Todd confirmed that there had never been any. Challinors pressed and eventually on 11^th November 2008, Mr Duncan at Coventry CC confirmed that over the last 16 years, he could say for certain the Properties had never even been 'threatened' with CPOs.

277. Pre-action correspondence continued back and forth and both parties contacted the Land Registry to make entries. Meanwhile, the Krishans may have been considering the now full-blown financial crisis and been desperate to sell. On 10^th October, J wrote to Challinors warning that they would sell the Properties after 14 days unless proceedings were issued. On 13^th October, Challinors invited them to extend the period, or they would seek an injunction. On 21^st October, J replied saying there was no basis for an injunction and stated after 24^th October the Krishans would deal with the Properties as they saw fit. The same day, J emailed the Krishans chasing them for documentation to disclose, including the PSA. On 22^nd October, J spoke to Dr Krishan where he appeared to be resistant to disclosure, but J advised him if helpful it would pressure the Claimant. Notably, even then, Dr Krishan did not tell J they had any signed copy of the PSA.

278. On Friday 24^th October 2008, Challinors issued a Claim Form under claim number 8BM30468, what I detailed above in my procedural history as 'the Original Proceedings. The Claim Form sought a declaration that Gracefield held the Properties on trust for the Claimant absolutely; and pleaded the transfer had been procured by 'misrepresentation and/or undue influence' from the Krishans. However, neither fraud, deceit, nor conspiracy were pleaded. Moreover, as I also explained, misrepresentation was not pleaded in the February 2009 Particulars of Claim, as HHJ Purle QC pointed out to the Claimant's then-Counsel at trial.

279. The same day, Challinors sent a long letter (and fax) to H responding to its long letter of 28^th August. Again, the broad thrust was the 'carrot' side of the Krishans' 'campaign' for her to transfer the Properties in 2005/06, setting out the Claimant's understanding and reassurance from the Krishans that the Properties would remain hers, at least beneficially. This was the stated basis for her trust claim and would be the basis for her later-pleaded contract claim. As I have said, it would have been better characterised (and in due course was), as a false representation of the position after transfer to induce the Claimant to do so. Challinors' letter again stressed and detailed the 'implicit trust' the Claimant had in the Krishans. But as I noted, the letter also mentioned the CPOs and said the Claimant:

"...was advised [from context, by the Krishans] not to contact Coventry City Council as she would be seen as influencing a compulsory purchase order procedure initiated by the Council. She was told on numerous occasions that there was an ongoing legal battle with the Council regarding CPOs."

As I said, this was the first articulation of the Claimant's case on CPOs. However, at this point, the Claimant (and Challinors) had been told by Coventry there had been no CPOs, but not yet had it confirmed as Mr Duncan later did that they had not even been 'threatened'. Therefore, this issue was put quite carefully, but mentioned that Coventry CC would be 'providing a history as regards threats of CPOs'. However, most importantly, Challinors concluded by confirming they had issued a Claim Form and enclosing a copy of it (not by way of service). Challinors said if the Krishans did not agree to extend the undertaking during proceedings by 4pm on 30^th October, the Claimant would apply for an injunction.

280. Since the Challinors letter was also a fax, I find on the balance of probabilities it would have arrived with H that day - Friday 24^th October 2008. In the light of what follows, I find that J or a colleague at H told the Krishans that day that the Claimant had issued a claim (if not necessarily sent them a copy of the letter and Claim Form). After all, J had been emphasising to Dr Krishan the importance of providing the PSA and other documents and now the Claimant had issued a claim - but not yet served it. It was now becoming urgent for those documents to be sent to Challinors - provided they supported the Krishans' case.

281. That explains the significance of the next day, Saturday 25^th October 2008. This crucial date has been revealed by the very proper disclosure of emails by Gowlings solicitors, acting for the Krishans in 2022 (but no longer doing so) as part of the disclosure exercise for the current proceedings. In his statement, the Krishans' then-solicitor explained that as part of an electronic review of the Krishans' emails, they had discovered emails between the Krishans, J and her firm H and SB in October and November 2008, which they confirmed had neither been disclosed to the Claimant earlier in the litigation, nor provided to Gowlings by the Krishans. They are clearly extremely important and should have been disclosed earlier. However, before reviewing the findings in the Gasztowicz Judgment and making my own about the forgery (which is not disputed even if the Krishans still deny responsibility for it), I will consider in detail the contemporaneous documents relevant to that issue in 2008-09.

282. The late-disclosed emails show that at 12.43 on Saturday 25^th October 2008, the lunch-time after Challinors confirmed to the Krishans' then-solicitors that proceedings had been issued, Mrs Krishan emailed SB, saying:

"Subject: Gracefield: Dear [SB], I have been going through some of the papers that I had before the dispute with Mrs Takhar. I found a second sheet copy of the profit agreement signed by Mrs Takhar but not by ourselves. I don't have the first sheet. Do you have the original signed copy ? We will send it with the change of name for the Pharmacy. [That last reference is to another business venture]. Speak to you soon. Parkash and Kewel."

SB replied on Monday 27^th October 2008 at 09.05:

"Morning Parkash, I have the original document, but it is not signed by either party. Can you please arrange to sign and send over. Regards..."

283. On Thursday 30^th October 2008, the deadline for replying to Challinors, at 11.44 am, J emailed (through her secretary) the Krishans a copy of a draft letter explaining that she had not been able to get hold of Mrs Krishan, but felt the letter should go (implicitly, that day). Given that the Krishans later replied to that email on 7^th November, I infer they did not confirm H's draft letter at the time, so she sent it. This confirmed that they would stand by their undertaking not to deal with the Properties without giving 7 days' notice and indicated that they had 'no intention of litigating by correspondence'. Indeed, since proceedings had now been issued, the substantive statements of the parties' respective cases in correspondence naturally ended too. The letter enclosed a Form 288b relating to the Claimant's resignation as director of Gracefield, a Stock Transfer Form for the one share in it to Mrs Krishan, a summary of work in progress of works done and Gracefield's Accounts for year ending 30^th November 2007 showing the Claimant as a creditor. I will return to the other enclosure in a moment.

284. However, in those 2007 accounts (I note sent by SB's colleague to Dr Krishan on 7^th August 2008) is the first reference to a £225,000 'Purchase Reserve - Management Fee', said to be a 15% charge on the 'uplift in value' of the Properties: the Shops from £100,000 to £225,000, the Cinema from £100,000 to £600,000 and the Co-Op from £100,000 to £975,000. These values for the Cinema and Co-Op were significantly in excess of Savills' valuations for the current value of the land and there appears to be no basis for them. Nor was there any basis for such a 'charge' - Dr Krishan admits the Claimant never agreed it. In evidence to HHJ Purle QC in 2010, he accepted he would not be entitled to both. Yet before me, having initially suggested it was removed from Gracefield's balance sheets after the Purle Judgment, he was taken to the 2011 and later accounts up to 2018 showing it was still there. Indeed, in 2014 after the Cinema was sold (but after the Claimant had issued the Set Aside Proceedings), Dr Krishan asked SB to calculate the returns from the sale with and without this 'fee', suggesting he was not treating it as an alternative at all. I find on all the evidence that Dr Krishan in early August asked SB to include this spurious 'management fee' as an 'insurance policy' to try to offset from any litigation the Claimant brought, having just received Challinors' first letter before claim in July 2008.

285. Going back to H's letter of 30^th October 2008 when that management fee first appeared, the last enclosure was the blank copy of the incomplete PSA and stated:

"Draft Profit Sharing Agreement prepared by [SB's firm], which reflects the contents of [its] letter to your client of 15 March 2006. We are instructed that there is a signed copy of the agreement which will follow."

I underline that to stress the obvious point that since 22^nd October when J last spoke to Dr Krishan, who at that time did not mention having a signed copy of the PSA and indeed was resistant to disclosing the PSA at all, his instructions had changed. As I have noted, on Saturday 25^th October 2008, the Krishans told SB they had 'found' a copy of the second page of the PSA that the Claimant had signed; and I find between then and Thursday 30^th October, the Krishans (probably Dr Krishan) had 'instructed' J that they had a signed copy. Certainly, SB's firm did not have one - as they had told H on 27^th August and they told the Krishans on 27^th October. As far as I can tell, this is the first reference to the PSA being signed between Challinors and H, and J said 'it would follow'.

286. However, it appears that having sent the Krishans a draft of her 30^th October letter, J understandably did not send them another copy of it (which was identical). As I noted, the Krishans only responded to J's 30^th October email a week later at 7.27am on Friday 7^th November, when Mrs Krishan emailed J (through her secretary) and said this (among comments about cheques and unrelated matters):

"Dear [J], Was this letter sent to Challinors ? Did you get the signed copy of the agreement of[f] [SB] or was it sent without the signed copy ?...

The urgency of Mrs Krishan's request is telling. J's letter had been sent announcing to Challinors that a signed copy of the PSA existed and would follow. That meant that sooner or later, it would have to be provided. Yet it is clear from the late-disclosed emails of 25^th October that the 'Claimant-signed' copy PSA had come from the Krishans. So, it is striking that rather than send it directly to J or even tell her about it, the Krishans did not send J directly 'the signed copy'.

287. The Krishans also emailed SB the same day - 7^th November - again only disclosed by the Krishans' later (but not current) solicitor in 2022 and so they are not mentioned in the chronology at [83] of the Gasztowicz Judgment. At 07.29am, two minutes after Mrs Krishan sent her email to J, Dr Krishan emailed SB:

"Dear [SB], We have not as yet had the draft profit agreement to sign. Please email and we will sign and return."

Later that morning, at 10.15 on Friday 7^th November, SB said that she had got this to bring to their meeting on Monday evening (i.e. 10^th November). Therefore, at that time the Krishans themselves had not signed. There is no suggestion in the emails to SB about what they told me - that they originally signed one in 2006 which had been lost. There are no notes of the meeting between the Krishans and SB on 10^th November 2008. However, given there is an undated copy of the PSA signed by the Krishans, I infer this is when they signed it for SB. If they had not already sent SB the 'Claimant-signed copy' (that I will find was their forgery) as suggested by their 7^th November email to J, I find they also gave it then to SB.

288. This flurry of emails on 7^th November about the PSA may have been prompted by Challinors' letter to H on 4^th November, which as well as queries about the other documentation disclosed by H on 30^th October asked:

"Do your clients have any evidence of the value of the compulsory purchase orders as alleged within the [PSA] to form the basis of valuation of £100,000 for all of the Properties ?"

Notably though, for whatever reason, Challinors did not chase the signed copy of the PSA J's letter had mentioned on 30^th October. Nor indeed did Challinors' letter of 21^st November, even when they wrote to H querying the documents recording the Claimant's resignation as a director from Gracefield and pointing out the stock transfer form disclosed only shows her transferring 1 share, but Companies House documentation showed that she transferred all 50 of her shares in 2006. There was no reference to the PSA or chasing up the signed copy of it. There was also no further correspondence about the PSA in 2008 or early 2009. I return to what the documentation shows about later in 2009. However, this may explain why the copy of the PSA which the Krishans had 'found' with the Claimant's signature lay dormant for a few months, since their own solicitors H still did not have it and the Claimant's solicitors did not chase it.

289. In the meantime, in November-December 2008, there was correspondence between Coventry CC and Gracefield or Mr Johnson about the improvement notices to the Properties, but little had been done. On 12^th January 2009, the Council finally ran out of patience with the Shops too and issued a s.215 improvement notice on those as well. On 7^th February, the Krishans instructed an agent to develop the Properties. Indeed, in February 2009 - long after the deadline for the improvement notices on the Cinema and Co-Op had expired, further emails suggest that Dr Krishan was liaising with professionals about demolishing the Cinema, which he authorised on 13^th February 2009, but it never occurred.

290. That is because days afterwards, on 18^th February 2009, Challinors served the Claim Form and Particulars of Claim I detailed above in my procedural history I need not repeat. In short, it was pleaded the Claimant and Krishans had made an agreement that she would transfer the Properties to Gracefield which would develop and rent them and pay her rent; that this agreement was procured by undue influence and/or unconscionable bargain (not misrepresentation) and that Gracefield held the Properties on trust for the Claimant and/or TTC. Doubtless, the proceedings were served on H on behalf of Gracefield and the Krishans just within the 4-month time-limit from issue of the Claim on 24^th October 2008.

291. In March 2009, Dr Krishan got quotes for remedial works to the Co-Op and Shops to comply with the planning improvement notices. The total was about £35,000 (just for compliance, not to develop them). Plans also appeared to be proceeding to demolish the Cinema after an asbestos survey. On 23^rd March, Challinors wrote to H indicating they were aware of the plans to demolish the Properties and asking for confirmation that it would not proceed otherwise they would apply for an injunction. On 24^th March, H told Challinors that demolition was required under the notice and it would proceed. Moreover, on Wednesday 25^th March 2009, J emailed the Krishans a draft letter inviting Challinors to apply for injunction.

292. It appears that as at 25^th March 2009, the Krishans' Defence had been drafted but not yet served, as Dr Krishan authorised that letter be sent by email, but added:

"The letter is fine to send. We will look at the Defence and Counterclaim and get back to you. There is a signed profit sharing agreement in place that SR says she has forwarded you in the file so this needs to be confirmed and changed in the defence as it says there is not one that is signed. Will look at the rest and get back to you." (my underline)

Indeed, the next day, Thursday 26^th March 2009, it appears from a file note that J's assistant at H had conversations with both Dr Krishan and SR, who mentioned a copy of the second page of the PSA signed by the Claimant but not by the Krishans. At 14.50, SR emailed J's assistant enclosing other documents. Further, at 17.05, SR emailed Mrs Krishan (with the subject 'agreement') enclosing 'signed agreement as requested'. That must be the backsheet supposedly 'signed' by the Claimant, as lastly at 18.16 that evening, SB emailed J directly saying:

"Further to our telephone conversation please find attached the copy of the profit-sharing agreement signed by Parkash and Kewal [i.e. the Krishans]. Apologies my colleague didn't send this over earlier with the copy of Mrs Takhar's signature - I was holding it in a separate file. As discussed, I will hold the original signature copy until further notice.".

Therefore, on 26^th March 2009, SB passed J copies of the PSA apparently signed by the Krishans (herself in her later email) and by the Claimant (via SR's earlier email). It is not disputed the latter was the 'copy PSA' later disclosed which had the Claimant's signature forged on it. The 'original' was never disclosed.

293. The Defendant's Defence is undated, but it must have been served between 26^th March and 9^th April when the Claimant's Reply to it was served. I detailed the Defence above at paragraph 17 and need not repeat it, save to say all allegations were denied, but also that it had obviously been slightly but importantly amended in the light of Dr Krishan's comment about the signed PSA, as paragraph 29 said:

"An agreement was drafted by [the Defendants' accountants] which was signed. Whilst the draft contained some of the terms of the agreement set out above, it did not in any event comprehensively deal with all that had been agreed as set out. This agreement is headed Profit Sharing Agreement and is purportedly dated 1^st April 2006." (my underline)

A counterclaim sought a declaration in accordance with the Defence's pleaded terms, seeking legal confirmation that Gracefield was the legal and beneficial owner of the Properties and the following declaration:

"A declaration that the first defendant is contractually bound (and the claimant to accept) that at the time the Properties are sold to distribute the net proceeds after all the proper costs of the first defendant have been paid such that (a) the claimant is repaid her loan of £100,000; (b) the claimant is thereafter entitled to a further £100,000 by way of deferred consideration; and (c) thereafter the net proceeds....are shared equally between the claimant... and the second and third defendants."

As I mentioned above at paragraph 17.4 above, this was not in exactly the same terms as the PSA itself, which 'entitled' the Claimant to £300,000 out of the Properties before a 50% profit split to the Claimant only. Nevertheless, the 'signed PSA' was squarely part of their pleaded case - specifically included at Dr Krishan's request and both he and Mrs Krishan signed a statement of truth in it.

294. It is possible that the service of this Defence prompted Challinors on 31^st March 2009 to apply for an injunction to restrain any demolition of the Cinema and in his own first involvement, HHJ Purle QC granted it on a without notice basis until the return date on 16^th April 2009. Whilst I do not have a copy of that, my understanding is that the injunction was continued to trial. I understand from other documents that the Claimant took responsibility for undertaking the works to the Co-Op and Shops under the planning improvement notices. Frankly, from rather confusing emails at this time from the Council, it is unclear what the position was on the Cinema, but it was not demolished. In March 2009, the Claimant had also got the valuations from Chamberlains of the Co-Op for £215,000, Cinema for £165,000 if demolished and Shops for £120,000 I noted above as plainly affected by 'litigation blight'. Moreover, Challinors also instructed the Claimant's then-Counsel to draft a Reply and Defence to Counterclaim, which as I noted was dated 9^th April 2009. Again, I have summarised the effect of this at paragraph 18 above and it included a specific plea of resulting trust on the basis of gratuitous transfer. The response to paragraph 29 of the Defence and the 'signed PSA' was simply to note the admission of an incomplete agreement, not to say the Claimant did not sign the PSA (although in fairness the Defence had not said that in terms).

295. It also appears that another order was made at a hearing on 12^th May 2009 before HHJ Brown QC, which I do not have either. H's letter to Challinors dated 7^th July 2009 accuses them of not complying with it, in that no works had been undertaken on the Co-Op or the Shops and Council Tax had not been paid on it, threatening an Unless Order. From Coventry CC's 2014 letter to the Claimant referred to earlier, it appears this was the point when Bobby Takhar started paying Council Tax and Rates on the Shops. H proceeded to apply for an Unless Order for those works to be done as Gracefield and the Krishans were under threat of prosecution. On 24^th July, Coventry CC indicated they would extend time for compliance but hold fire on action until after a visit in October 2009. That was how the Properties were left. It was around this time the Claimant faced investigation into benefit fraud (given the timing, I suspect prompted by the Krishans or Linda Hunt), which went nowhere. Whilst her benefit position until 2006 was complicated by the Properties, the DWP accepted there was no 'fraud' and that is clear to me.

296. However, H's letter of 7^th July also proposed disclosure in the proceedings took place by 4pm on 13^th July 2009. It appears to have occurred around this time, as there is a flurry of correspondence in late July between H and Challinors about partial disclosure on each side (for example the lack of emails from the Claimant, although it is accepted she did not have a computer until 2008). But Challinors did not complain about lack of disclosure of the PSA and other key documents. Therefore, I infer that around this time, the Defendants disclosed the altered JS Invoice which the Krishans gave the Claimant in April 2008 (not the original version Mr Matthews also saw in June 2008). It is unclear whether the first page of the 'Balber Takhar Account' was disclosed but the second page they did disclose had been altered, as I mentioned above in assessing the evidence. It was altered so the original reference to 'Total so far: £565,600' had become 'Total estimated approx so far £565,600. Will check'. It is true that this is a small change, but it is important: showing the Krishans trying to soften their huge exaggeration. It also demonstrates their story to me about an original typing error is nonsense, since they amended the document without altering what they said was a typo on the first page. When talking of the document with the original first page and altered second page, I am calling this the 'Altered Balber Takhar Account'.

297. Crucially, whilst I do not have the disclosure statement, I note on the chronology and accept that on 13^th July 2009, H disclosed to the Claimant and sent to Challinors the copy PSA with the Claimant's signature on it, later admitted to be forged. Indeed, it is not disputed that the first date on which the Claimant could have seen the PSA with her forged signature was on 13^th July 2009. As I said at paragraph 19, but repeat now in context, three PSAs were disclosed then:

297.1 The first was a full unsigned version, in the same terms as I have quoted.

297.2 The second version of the PSA was undated copy signed by the Defendants.

297.3 The third version of the PSA disclosed was a copy (not the original) of the second page of the PSA 'signed' by the Claimant. It is unclear when Challinors requested inspection, but some documents were requested on 14^th August and the PSA with the Claimant's 'signature' was specifically queried by Challinors on 1^st October 2009 so they certainly had it by then. That is confirmed by the statement in the Set Aside Proceedings from the solicitor at Wragge & Co whom the Krishans had instructed in September.

298. Dr Krishan annexed this to his statement of 15^th December and said at para. 42:

"On 12^th April 2006, I saw [SB]. She handed me a copy of a Profit Sharing Agreement that she had drafted. My wife was in India, but when she returned, we signed this on behalf of Gracefield and my wife gave a copy to the Claimant for signature. We wanted [her] to have time to consider this, so she took it away before signing it. I understand she then forwarded a signed version to SB, as she had been requested.."

Mrs Krishan said this in her December 2009 statement at para. 36:

"While [the Claimant and I] were away [in India], Sue Bowdler had prepared a Profit Sharing Agreement. When we returned, my husband and I signed it. We also gave a copy to the Claimant. We suggested that she should take it away and if she was happy with it, sign it and return it direct to SB. I understand that she did that and SB retained copies of the Profit Sharing Agreement signed by all parties."

The Claimant said in her December 2009 statement at paragraph 323:

"...I do not know if Hamiltons drafted the profit share agreement ... I had not seen it before the proceedings. I do not recollect signing it or being asked to. I do not have a copy nor have I ever. In summary there was never any such agreement discussed or agreed with me. It was not mentioned to me by the Second or Third Defendant on any occasion we were together or by any other form of communication."

Mrs Krishan responded in a February 2010 statement at paras 12 and 13:

"...[T]he Claimant states that she had no knowledge of any Profit Sharing Agreement. This is not correct....[SB] provided a draft Profit Sharing Agreement to my husband in April 2006. I gave a copy to the Claimant for her to take home and consider and she then apparently signed the Agreement and returned it to [SB]. There is no copy of the Profit Sharing Agreement with both the Claimant and mine and my husband's signatures on it because we did not all sign the Profit Sharing Agreement together."

That remained the parties' respective cases in cross-examination at trial in July 2010 before HHJ Purle QC. As I noted at paragraph 20 above, in April 2010, he had refused the Claimant's last-minute application on 31^st March 2010 for handwriting expert evidence. Therefore, in cross-examination of Mrs Krishan, all the Claimant's Counsel was constrained to do was point her to some curiosities in the appearance of the copy PSA with the likes of dots and creases and suggest that if the Claimant had agreed and signed the PSA, she would have done so when handed it in April 2006. Mrs Krishan could only respond to that point with this:

"All I know is that [the Claimant] took it away and she signed it and sent it back and we did the same with our copy."

The following exchange in cross-examination of Mrs Krishan is also relevant:

"Q. How did you know she had returned it to the accountants ?

A. I didn't actually until much later. I assumed she'd returned it..

Q. Did she tell you she had signed it?

A. Yes, she did somewhere along the line but I can't precisely..."

299. SB also gave evidence on this issue. Her December 2009 statement said at para.27

"Although I passed the draft [PSA] to Dr Krishan on 12 April 2006, he did not sign it there and then. I did, however, receive a signed copy from the Claimant some time afterwards."

However, from the Wragge solicitor's evidence in the Set-Aside Proceedings, it appears that in response to the handwriting expert application, in April 2010, he exchanged emails with SB about the provenance of the copy PSA and she said:

"I do not have the original signature of Mrs Takhar - only a copy - we have never had sight of the original. The signed document was passed from Mrs Takhar to Parkash although I am not sure if Parkash had sight of the original or was simply supplied with a copy by Mrs Takhar".

That solicitor subsequently spoke to SB on 24th May 2010 and noted this:

"Check with PK. [SB] says PK handed it to her in 2009. PK dug it out once in litigation. SB thinks she might have received PK/KK signed PSA after the event. Did anyone ever sign the PSA at the time" (PK is Mrs Krishan)

Therefore, insofar as SB's statement had said that 'she received a signed copy from the Claimant some time afterwards', it is incorrect on SB's own instructions. In fact, SB was telling Wragges after her statement had been exchanged that she received the copy PSA with the Claimant's signature on it from Mrs Krishan in 2009 and that Mrs Krishan had 'dug it out once in litigation'. In fact, from the emails only disclosed in 2022 it appears probable that the Krishans either emailed it to her in late October 2008 or handed it to SB at their meeting on 10^th November 2008 after she had emailed SB on 25^th October 2008 to say that she had found it amongst some papers. I found that was also the time SB received the Krishans' signed PSA as well. However, it may have been misfiled, as she said:

"Q You did not post a copy of this [PSA] to Mrs Takhar, did you ?

A No, I passed a copy, I believe to Dr Krishan on 12^th April

Q In fact, you did not see Mrs Takhar sign this agreement, presumably ?

A No

Q You see you received a copy back with Mrs Takhar's name on it but that did not come back direct from Mrs Takhar, did it ?

A I do not know where that came from, I'm sorry. I don't deal with the post so do not know where it came from.

Q. You have not tried to ascertain where it came from?

A. No. I do know for some reason when that was received it was actually misfiled on another client file, so it wasn't on the Gracefield file. It was on a separate client file.....

THE JUDGE: Did you see it at the time ?

A I don't think I did see it at the time, no.....

Indeed, it is concerning that even though SB was asked at length about how she knew the copy PSA had returned and was able to confirm that she had never seen one with an original signature and that it was misfiled, she denied that it was handed over at a meeting with the Krishans, just as she had originally handed it over in April 2006. Yet SB did not mention in answer there what she had told the solicitors in April-May 2010 about being handed back the copy PSA with the Claimant's signature by Mrs Krishan once the litigation had started, in 2009. Whilst I accept this was inadvertent, it meant HHJ Purle QC got a wrong picture.

300. Sure enough, as later found in the Gasztowicz Judgment, to which I will now turn, the 'signed copy PSA' was pivotal to the Purle Judgment, which HHJ Purle QC gave orally on 28^th July 2010, observing at [21]-[22]:

"...Mrs Takhar's case is she didn't sign [the PSA] at all and she has never seen the agreement until this dispute arose. However, no case of forgery is advanced.... 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 signed away, which was returned, probably by her in some way, duly executed to [SB'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."

Whilst it is fair to say HHJ Purle QC did not accept other parts of evidence of the Claimant and her son Bobby, he also did not accept the Krishans' on the Balber Takhar Account and Options for Gracefield, observing:

"29....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 [the Claimant's Counsel] 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 not because of any joint venture agreement...

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 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."

Therefore, it seems HHJ Purle QC's concerns over 'the Balber Takhar Account' and 'Options for Gracefield' were assuaged by the 'contemporaneous evidence' which was 'too compelling'. It seems clear this was a reference to the PSA. Moreover, at [32]-[33] of his Judgment, HHJ Purle QC noted that he had been referred to the authorities, but essentially rejected resulting trust, unconscionable bargain and undue influence on the facts, saying on the latter:

"Whilst there was undoubtedly a relationship of trust and confidence, it was not a relationship in which Mrs Takhar put her decision-making powers at the disposal of the Krishans. She retained her own decision-making powers and the transactions were not those which on their face called for an explanation. In any event, such explanations as I have heard persuade me that there has been no abuse of trust and confidence in this case."

301. I pause there in the timeline at the Purle Judgment in July 2010 to turn to the Gasztowicz Judgment in 2020. I have detailed the procedural history in the intervening decade (including the Supreme Court decision in 2019) which I need not repeat. However, it is worth emphasising one observation I made there that in paragraphs 9 and 10 of her 2020 statement in the Set Aside Proceedings, Mrs Krishan specifically denied the suggestion the Krishans' solicitor in 2009-2010 recorded from SB (whom by that stage they were blaming for the forgery) that Mrs Krishan had passed SB the copy 'signed' by the Claimant. That was not mentioned in Mrs Krishan's 2010 evidence, nor in SB's own evidence as I noted. Nor did Mrs Krishan mention in 2010 or 2020 what she said in the later-disclosed emails from 2008 that she had 'found' a backsheet of the PSA signed by the Claimant and sending it to SB and J. This was only prompted by the emails of 25-27^th October 2008 I have discussed disclosed by her new solicitors in 2022 which had not been previously disclosed in the whole of this litigation.

302. Therefore, the following findings in the Gasztowicz Judgment need to be read with the fact he had not seen those 25-27^th October 2008 emails firmly in mind. Mr Gasztowicz QC's key findings were as follows as I set out in detail:

"64. In relation to the Profit Sharing Agreement document, the Claimant's handwriting expert, Mr Radley in his report of 4th October 2013 concluded that there was conclusive evidence of the copy of the Claimant's signature on the Whiston letter having been transposed onto the document. It matched exactly - even though no individual [would] sign...a complex signature of the sort involved here in exactly the same way on more than one occasion. The Defendants' own expert, Mr Michael Handy, in his report dated 2nd July 2020 agreed there was conclusive evidence of this transposition. At trial, no doubt was cast on these conclusions; indeed, the Defendants through their counsel accepted the document had been forged in this way.

65. I accordingly find the Claimant's signature on the profit sharing agreement document to have been forged by her genuine signature on the Whiston letter having been transposed onto the document prior to it being photocopied/scanned.....

86. It seems to me most unlikely that [SB] or anyone at [her firm] would have done this, however. It would elevate an act of negligence (which had never been alleged) into a serious fraud and attempt to pervert the course of justice (which if discovered would have been added on top of such negligence). Furthermore, if they had lost a copy which had been returned signed and wanted to behave dishonestly (rather than just saying so and supporting the Defendants' case in that honest way), they could simply have continued with the line that they had no copy of it, and said that it must therefore never have been returned, there being no documentary or other independent evidence to the contrary.

87. In contrast, the Defendants had every reason to forge the document. Although the Defendants have at this trial sought to minimise its importance on the basis that the agreement relied on was merely oral anyway, and that this document did not contain reference to the agreement that the 50% of the net profits remaining in Gracefield after sale of the properties, and due payments, being theirs, it was a document which, if signed, [Dr Krishan's] own witness statement describes as being seen as critical to the defence.....

88. And it was, of course, of great value to the Defendants to be able to produce a copy of the draft signed by the Claimant. Such a document signed by her was likely to show the Claimant's case that there was no agreement for profit-sharing to be fundamentally wrong, and the Defendants' case that there was such an arrangement to be fundamentally right.

89. The point is made by...the Defendants that at the time the document was drafted, the Claimant owned half the shares in Gracefield and that a term stating they were to get the 50% of the net proceeds remaining in the company after the Claimant was paid her 50% could have been inserted in a forged document if the Defendants were going to forge her signature. However, the profit-sharing agreement document had been drawn up by [SB] in the terms that it was, for whatever reason, and had been referred to in the Defence from the start, with no reference to any other document having been produced or signed. Forging the Claimant's signature on a copy of it would simply involve one addition and be entirely consistent with what the Defendants had said about the documentation there was. This would considerably assist the[m] on the fundamental point that profit sharing had been agreed, leaving the Claimant's evidence discredited and the Defendants free to convince the court... the 50% net profit left in Gracefield was to be theirs - as in fact they subsequently did at trial. As mentioned above, they also in fact held all the share capital in their names by then.

90. In terms of opportunity for the Defendants to forge of the Claimant's signature by transposing her genuine signature on the Whiston letter onto a copy of the Profit-Sharing Agreement document, this would only have been there if the Defendants had access to a copy of that letter.

91. A copy of the signed Whiston letter may well have been sent by Mr Whiston to the Defendants, when received by him. Aside from this, the evidence shows that a copy of the signed Whiston letter was certainly sent to the Defendants' new solicitors by [Mr Whiston's firm] in August 2008. The Defendants' solicitor, [J], then wrote to Challinors...on 28th August 2008 a detailed letter setting out how the [Krishans] had helped the Claimant and refuting allegations of fraud made by the Claimant in relation to their dealings with her, and attached a copy of the Whiston letter to it.

92. [Dr Krishan] went...before me from saying that he 'would' have been sent a copy of this letter by his solicitors to saying he positively remembered there had not been any attachments to it. He was obviously closely involved in the litigation and it would seem surprising if he did not want to see relevant documents as referred to in that letter. Whether or not he read them in detail then, he would have been likely to have got and kept copies of them...[that] would have been available to him later, giving the opportunity of transposition of the signature from the attached Whiston letter onto the profit sharing agreement document. Taken with all the other evidence in the case which suggests transposition of the Claimant's signature from it by them, I am satisfied the Defendants did have access to the Whiston letter...

99. It is not clear how the Second Defendant was able to instruct his solicitors to write to the Claimant's solicitors on 30th October 2008 that a 'signed copy of the letter would follow'...when there is no evidence of [SB] changing [her] position as expressed on 27th August that they had no record of the return of a signed copy of the Profit Sharing Agreement document. ....On the evidence, only on 26th March 2009 did [SB's firm] say they had a copy of it. Had the Defendants themselves provided, or been intending to provide, a purportedly signed copy of the letter to [SB's firm] (which could then be produced by them to the Defendants' solicitors) they would obviously have been able to give such instructions, however.

100. It seems to me likely that that is what happened. It is borne out by the statements of [SB] nearer to the time.....

109. [Yet her answers in cross-examination] suggests that when [SB] said in her witness statement that she "received a signed copy from the Claimant some time afterwards", she meant she "received a copy signed by the Claimant sometime afterwards". However, that she did not know where it had come from was at odds with her previous statements, both written and verbal that it had come from the [Mrs Krishan], whether then put on the wrong file or not.

110. I consider it likely the Defendants provided the document to the firm after the litigation had commenced, by one means or another in order for it then to be produced as important documentary evidence apparently signed by the Claimant, of a type that would otherwise have been lacking.

111. The Defendants had the motive, and the probable opportunity, to do this, and it explains how [Dr Krishan] was able to assert to his solicitors on 30th October 2008 that a copy signed by the Claimant would be able to be produced subsequently, even though [SB] had said at that time that they did not have any such copy.....

[The Gasztowicz Judgment at [113]-[121] then went on to find the Balber Takhar Account and Options for Gracefield were 'demonstrably untrue' for similar reasons as in the Purle Judgment. It then continued:

122. The Defendants' evidence before me was also unsatisfactory in other respects. When asked directly about how the signed Profit Sharing Agreement document was returned, the evidence of both Defendants before me was that [Mrs Krishan] had been told by the Claimant in front of independent witnesses that she had returned a signed copy to [SB's firm].

123. Although the return to [SB's firm] of a signed copy of the Profit Sharing Agreement document was enquired into at the original trial... no mention was made by either of the Defendants of the Claimant having stated this in front of witnesses (who might potentially have been identified to prove or disprove that) then. Furthermore, although the question of whether a Profit Sharing Agreement document had ever been signed by the Claimant (which might for example have been lost by SB's firm who...panicked into forging another copy, as the "alternative theory" went) was brought into sharp focus in the present trial by the Defendants themselves in their witness statements, no mention was of her having said this in front of witnesses.

125. There was no mention in the Defendants' witness statements for the current trial to them having been told by the Claimant that she had signed and returned the Profit Sharing Agreement document before witnesses. Nor in the Defendants' correspondence, such as their solicitors' letter responding to the letter before action, was there any reference to the Claimant having said she had signed the document, let alone that she had done so before witnesses, showing her agreement thereto...

The conclusion I am drawn to is that these details are a recent fabrication designed to support their case in relation to the signing and return by the Claimant of a copy of the Profit Sharing Agreement document.

126. All this affects the view I have formed of the matter. I am satisfied, on the balance of probabilities, that not only did the Defendants have strong motive, and opportunity, to forge the document by transposition of the Claimant's signature onto it from elsewhere (and there is no evidence or sufficient reason to think that anyone at [SB's firm] did so), but that they did do so.

127. Based on all the evidence I have heard, the Defendants were in my judgment, on the balance of probabilities, responsible for the forgery of the signed profit sharing agreement document by adding the Claimant's signature to a copy of it by transposition from the Whiston letter. This amounted, in the words of Aikens LJ in RBS, to 'conscious and deliberate dishonesty'.

128. I should add that the point was made by [the Defendants' Counsel] in submissions that the Defendants as professional people would not have forged the document, and also that they did not object to the Claimant's application for permission to call expert handwriting evidence made shortly before the trial before Judge Purle. However, though the court will naturally be slow to find fraud, it is not limited to the manual classes. On the second point, their non-objection to the application may have been an act of bravado, designed to avert suspicion, in a belief also that as the true signature of the Claimant had been transposed and only a photocopy document was available it would, if the application was allowed despite its proximity to the trial date, have gone undetected.....

136. No doubt Judge Purle as the trial judge came to the conclusion he did - that there was a transfer of beneficial ownership on the basis of a profit sharing agreement as the Defendants contended, not a wholly different arrangement as the Claimant contended - for a variety of reasons, as will often be the case in a trial. I have of course carefully considered the judgment as a whole. However, the signing of the Profit Sharing Agreement document by the Claimant as he believed it to be was undoubtedly one....

137. In any trial, and in a fraud trial in particular, the court is of course looking for independent and contemporaneous indicators of where the truth lies on crucial issues, such as in this case, whether there was a profit sharing (or "joint venture") agreement. The forged document clearly evidenced this in the absence of forgery of Mrs Takhar's signature on it. Had the Judge known that her signature on the copy of that before him had been forged, for which the Defendants were responsible (causing him also to weigh their oral evidence in the light of that knowledge), that plainly would have (in the words of Aikens LJ in RBS) "entirely changed the way in which the first court approached and came to its decision" and it was plainly an "operative cause of the court's decision to give judgment in the way that it did".

138. Applying in full the test laid down by Aikens LJ and approved by the Supreme Court in Takhar itself - which in my judgment represents the law, as set out above - it was plainly material to the judgment given at trial...."

Mr Gasztowicz QC at [140] finally rejected a submission that a second trial would make no difference to the outcome, as inconsistent with the RBS case.

303. Those findings are binding on the Krishans, whether as an issue estoppel arising in the conspiracy claim largely based on that forgery, as Mr Halkerston submitted and I accept, or as a 'juridical fact' as Mr Graham accepted. Either way, the Krishans are, as Mr Perring engagingly put it (in a very different register of language from his erudite submissions on the law), 'stuck with it'. However, as I observed when considering issue estoppel, whilst Mr Halkerston did not argue the Krishans were prevented from doing so, the Krishans firstly gave evidence that they did not forge the Claimant's signature on the disclosed PSA (stressing the finding in the Gasztowicz Judgment that they did so was only 'on the balance of probabilities'). Secondly, they also said that both they and the Claimant had originally signed copies of the PSA back in 2006: themselves based on their own evidence and the Claimant based on Linda Hunt's account given through Mrs Davies and Dr Handa. Mr Graham knew he could not - and so did not - argue the first point, but fearlessly submitted on the second strand of his clients' evidence:

"The signature on the copy of the signature page purportedly signed by C has been found to be a forgery for which the Krishans were responsible. That is a juridical fact. This does not affect the Krishan's belief that C did sign a version of the written Agreement and did post it back to [SB's firm] ...The forging of C's signature on one version of the written PSA is an established juridical fact and is clearly not justifiable or excusable. However, at most its effect was to strengthen what was already a good and strong case, that the parties entered the Agreement contended for by Ds."

I deal with the two different positions in the Krishans' evidence in reverse order.

304. I have absolutely no hesitation in rejecting the suggestion that the Krishans and the Claimant signed the PSA in 2006 and they signed it then and again in October-November 2008. On the issue of the Krishans' signing, at no stage in the contemporary documents, or in any of their earlier evidence over the last almost 15 years, have they ever suggested that happened. It would also be inconsistent with SB's 2008 emails suggesting she had no signed copy of the PSA. The assertion of 'another misfiling' is just that - an assertion: all the easier to make because it cannot be gainsaid, not least because SB is no longer a witness as the Krishans dishonestly accused her of forgery. Whilst in cross-examination at the Set Aside Trial in 2020 they certainly did suggest that the Claimant originally signed the PSA, Mr Gasztowicz QC rejected that at [122]-[125] of his judgment I quoted above, not least because, yet again, they had never said it before, not even in their own statements for the trial before him. Therefore, the Krishans are seeking to run a factual case he rejected, which again to my mind seems to give rise to an issue estoppel in the conspiracy claim. However, even if I am wrong about that, I unhesitatingly reject this attempt to exploit the sadly-deceased Linda Hunt's wild accusations about the Claimant, whether directed at Mrs Davies or Dr Handa (neither of whose evidence was particularly helpful to me in any event). Whatever the difficulties with other parts of the Claimant's evidence, I have and do entirely accept her consistent and clear evidence that she never saw at the time or signed any version of the PSA. Indeed, this new account by the Krishans was so late in the litigation and so threadbare that it says less about the Claimant's credibility than the Krishans' own credibility, especially in proferring it through others (by multiple hearsay from a dead 'witness'). Moreover, their preparedness simply to brush aside the findings in the Gasztowicz Judgment weakens it further.

305. Having dealt with the case Mr Graham argued, I return to what he did not - whether the Krishans forged the Claimant's signature on the PSA disclosed in July 2009. I have treated the Krishans as having done so throughout this judgment so far, because their own lawyers rightly accept it is at least a juridical fact and I find it is an issue estoppel on the conspiracy claim. However, as I said, the Krishans in their evidence did not appear to accept even that juridical fact - pointing to the Gasztowicz Judgment being 'on the balance of probabilities'. Therefore, whilst I make my findings on that same - and correct - correct civil standard of proof, I will then - even though it is unnecessary to do so, go on to test it by applying the criminal standard. After all, as I explain later, the forgery of the Claimant's signature and its deployment in the Original Proceedings was a crime, albeit one that would never realistically be prosecuted as it was also a contempt of court. However, I start by saying I am satisfied on the balance of probabilities that the Krishans together combined to forge the Claimant's signature on the PSA in October 2008 then deploy it in evidence from July 2009.

305.1 Firstly, whether or not it is binding on me, I wholeheartedly agree with and adopt the reasoning in the Gasztowicz Judgment quoted above. Those findings apply to both Mrs Krishan and Dr Krishan acting together.

305.2 Secondly, even though Mr Gasztowicz QC did not have the benefit of the Krishans' and SB's email exchanges on 25-27^th October and 7^th November 2008, they actually demonstrate the correctness of his perceptive finding even without them at [99]-[100] of his judgment. He found the Krishans 'instructed' J before her letter of 30^th October 2008 that a signed copy of the PSA would follow which they then provided, as the emails to and from SB prove. Yet rather than sending it directly to J as she requested, the Krishans' emails of 7^th November as a whole show they wanted to send it to her via SB, which would have the effect of concealing their 'discovery' of it on 25^th October. There is no good reason for such concealment from their own solicitors if this was genuine. This concealment was redoubled by their failure to disclose these emails to their successor solicitors later in the proceedings, plainly forcing the latter to do so very properly themselves. However, when one adds into this suspicious scenario the 'coincidence' that on 25^th October 2008 Mrs Krishan supposedly 'discovered' the PSA signed by the Claimant, happening to be the day after she had issued proceedings, as I find they were told, this becomes utterly untenable. The overwhelming inference is that the Krishans did not 'discover' this PSA, they forged it on 25^th October 2008 - together. As the 7^th November emails show, this was most likely passed to SB by the 10^th November 2008, when the Krishans also signed the PSA for the first time. This left both 'signed' PSAs - their genuine one and the one they had forged with the Claimant's signature - in SB's files. This is consistent with SB's account to the Krishans' solicitors in 2010 that Mrs Krishan passed her the 'Claimant-signed' copy PSA after the litigation had begun, even though I find it was more likely to be 2008 than 2009. Either way, the admittedly forged PSA which was disclosed in July 2009 was the same document the Krishans handed to SB in 2008, since they were the ones who forged it: on 25^th October 2008, in response to the issue of the claim. I emphasise I am satisfied of that conclusion even without reliance on the Gasztowicz Judgment, but simply on the basis of the contemporary documents, including those deliberately concealed.

305.3 Thirdly, my conclusion is reinforced by the Krishans' wholly unreliable - indeed I find dishonest - evidence to me, trying to 'explain away' these undisclosed emails. Mrs Krishan in her 2022 statement said:

"I have been shown [the recently-disclosed emails] for the purposes of making this statement. Until I saw these emails again, I did not recall them at all - it clearly went out of my mind. However, I now recall that sometime in 2008, when I was going through some old SAT [exam] papers that I was due to throw out, I found some papers that I presumed Mrs Takhar had left, and that amongst them was a copy of what I thought may have been the original agreement, because it only had Mrs Takhar's signature on it. I knew the original had been sent to the accountants in 2006, so I was not sure whether this was a copy or what it was, but I sent it on to [SB] and [J]...in any event. Nobody replied to say what it was, copy or original, which I would have expected them to do, and so I forgot about it."

Mrs Krishan stuck to this story at trial, but when pushed about why she did not disclose these emails earlier, she insisted that despite her solicitor saying in 2022 that his firm had not seen them, they had access to her emails. She said that the fact she found the PSA the day after proceedings were issued was just a coincidence. Yet she also appeared to accept that this document was the forged PSA. However, she could not then explain how she came to have it if the Krishans did not forge it. Nor could she give any remotely plausible explanation of why she did not disclose emails under her control in her own email account which explained the provenance of a document prior to a trial about the provenance of that same document. She said she 'did not realise its significance'. This frankly absurd 'explanation' of these emails is in fact flatly contradictory of them. They prove that that SB did ask for the signed copy of the PSA and indeed J was pressing the Krishans for it (yet only a week earlier Dr Krishan seemed reluctant to disclose it). However, the Krishans did not send this 'discovery' straight to J, but asked her if she had received it from SB, which is to whom they gave it. This is totally inconsistent with the evidence of Mrs Krishan. Dr Krishan effectively simply followed her evidence on this point. Indeed, he also had to accept before me that at the Set-Aside Trial, he had accepted the signed PSAs were not produced until after the litigation had started; and he had not suggested that he and Mrs Krishan had signed an earlier PSA either.

305.4 Fourthly, on that latter point, I have rejected above the Krishans' entirely new story that they signed two copies of the PSA: one in 2006 and one in 2008. As I also explained, that weakens their credibility - on this issue too.

305.5 Finally, speaking of other issues, in my assessment of the evidence above which I need not repeat, I found the Krishans' evidence to me seriously unreliable on various other points that were not before Mr Gasztowicz QC.

Indeed, I have a far wider canvas of evidence before me than he did in 2020 and in my judgment, it is not just 'more likely than not' that the Krishans combined to forge the Claimant's signature on the PSA in October 2008 and to deploy it in evidence in 2009. The evidence to support that is so overwhelming that I am satisfied on the criminal standard so that I am sure of it (or to put it another way, I am satisfied beyond reasonable doubt of that forgery and deployment).

306. As Mr Gasztowicz QC found, the Krishans forged the Claimant's signature on the copy PSA, using her signature on the letter from her to Mr Whiston on 24^th March 2006 confirming her instructions that the Properties be transferred to Gracefield for £100,000. I found above that Mrs Krishan drafted that letter for the Claimant to sign. Whilst it may be too much of a stretch to say the Krishans kept a copy of the signed letter to use it forgery over two years later, I certainly find they were familiar with this letter and as Mr Gasztowicz QC found, a signed copy had been sent by J to Challinors on 28^th August 2008. I found, as is common for such a detailed 'first substantive reply', that a copy of that letter - and its enclosures including a copy of the Whiston letter with the Claimant's signature on it - was sent to the Krishans as well. I also note that is at almost exactly the same time - 27^th August 2008 - as J was corresponding with SB and SR and asking about the PSA - including asking the Krishans whether they had a signed copy. As I noted above but repeat here to assist, that day Mrs Krishan said:

J responded by asking whether the PSA had been signed, Mrs Krishan replied:

"As far as we know [it] was signed. Not sure where it is or who has copies."

Therefore, on or around 28^th August 2008, the Krishans had been reminded by J of the PSA which was increasingly apparent as central to their case - and asked if there was a signed copy, which they said there was not. I find they recalled they still had the blank PSA SB originally gave them in 2006, which is the reason that at that time, there was no copy signed by anyone on her file. The seed of forgery was planted. Within days of being reminded about the PSA and finding their blank copy, they were also sent J's letter of 28^th August, including the Whiston letter. However, they did not yet act. That only came once they were told on 24^th October that the Claimant had issued - but not yet served - her claim. They knew litigation had arrived and there was a risk their conduct to the Claimant would be exposed, as Mr Matthews had already probed with the costs in the Balber Takhar Account earlier in the year. If they also were sent Challinors' letter of 24^th October, as I find, they would have then read about the CPOs and realised they needed to buttress their position. In any event, on Saturday 25^th October 2008, they returned to their own unsigned copy of the PSA from 2006 and took up the Whiston letter from 24^th March 2006 - almost exactly the same time as the date in the PSA - 1^st April 2006 - to add plausibility to the 'Claimant's signature'. As Mr Gasztowicz QC said at [64] of his judgment, the Defendant's own handwriting expert agreed in his July 2020 report that there was conclusive evidence the Whiston letter had been transposed onto a copy of the PSA. I suspect it was by photocopying one onto the other, which may account for the dots and lines the Claimant's Counsel noticed and put to Mrs Krishan in 2010. However, it does not matter precisely how they did it. I am satisfied (indeed, sure) that they did so. Having done so that morning of 25^th October 2008, they then put their plan into action by emailing SB to say that they had 'found a second sheet copy of the profit agreement signed by Mrs Takhar but not by ourselves' amongst some old papers. As I said, they then did not send this to J, but gave it to SB, by email before or at the latest at the meeting on 10^th November, when they signed another copy. Finally, this was provided to H in March 2009 and disclosed on 13^th July 2009.

307. I turn, with some relief, to the last topic in my findings of fact: the sale of the Properties in 2011-2014, which I can take very shortly indeed. The only issue which is factually disputed is the Properties' value at the time (returning me to Ms Dobson's evidence). However, I will pick up the narrative again on 28^th July 2010, at the very point at which HHJ Purle QC dismissed the Claimant's claims. Entirely unsurprisingly, the first to speak was the Defendant's Counsel, who asked for and was given a declaration in terms of the PSA plus the Krishans' 50% share rather than strictly of the counterclaim as such - that Gracefield was the legal and beneficial owner and that it and the Claimant was contractually bound that upon the sale of the Properties, she would receive £200,000 then for the net proceeds to be split 50% to her and 50% to the Krishans.

308. This can now be seen in context of my findings. As I explained above, the Krishans' attempts to cajole and pressure the Claimant into agreeing to sell the Properties in 2008 after she had objected to the auction simply ended in her suing them on 24^th October 2008. In the light of my finding that the Krishans forged the Claimant's signature on the copy PSA the very next day - 25^th October 2008, it is clear their plan had changed. Whereas in 2005/06 they had cajoled the Claimant into transferring the Properties to their company and shortly afterwards into their full control, I find that from 25^th October 2008, they decided to use forgery in the coming proceedings to maintain and secure their control of the Properties, so that they could sell them as soon as they could and finally release the returns.

309. This conclusion is supported by the Krishans' remarkable determination in 2009 - relying on the improvement notices which Coventry CC had issued but showed little interest in enforcing - to demolish the Cinema. As H said to Challinors at the time, the Krishans considered this would enhance the land value. However, with an injunction from March 2009, they handed over responsibility for compliance on the Co-Op and Shops to the Claimant. At the same time, now that proceedings had been served, the Krishans decided to rely on the signed PSA in their Defence, as Dr Krishan insisted in his email of 25^th March 2009 to J that it be amended to refer to the signed PSA. The next day, 26^th March, Dr Krishan spoke to J, who then spoke to SR and SB, who sent J for the first time the 'signed' copies of the PSA. This included both the copy with their forgery of the Claimant's signature and the copy the Krishans signed for the first time at the meeting with SB on 10^th November 2008, by which time SB had the forged copy.

310. Consistently with the Gasztowicz Judgment and the emails they both sent at the time, I am sure the decision to forge the Claimant's signature was a joint decision which the Krishans executed together, as they had executed their plans together back in 2005/06: Mrs Krishan had cajoled and persuaded the Claimant and produced letters for her to sign; and Dr Krishan (once he had the Claimant's authority to deal with the Council from 4^th July 2005), had told (along with Mrs Krishan) the Claimant there were CPOs, or at least deliberately exaggerated their likelihood and consequences. The Krishans have been a team throughout and they supported each other's lies in the Original Proceedings as they supported each other's (what I find on this to be) lies in their evidence before me. Once the forged PSA was disclosed in July 2009, they not only contended the Claimant had signed it, they dragged in SB to give evidence to that effect, yet that did not reflect what she told their solicitors, or the October 2008 emails the Krishans concealed.

311. However, having succeeded in the Purle Judgment, the Krishans immediately obtained their declaration, albeit not in the terms originally sought, but in the terms of the PSA upheld in the Purle Judgment: with the Claimant on the sale of the Properties entitled to £100,000 'repayment of her loan' and a further £200,000 'by way of deferred consideration', with the net balance after expenses etc being shared equally between her and the Krishans. Moreover, having sought and inevitably been granted their costs (although reduced to 80% by HHJ Purle QC because of their misleading Balber Takhar Account and Options for Gracefield documents), the Claimant was ordered to pay £100,000 of the Defendant's costs on account and total costs were sent for detailed assessment.

312. From Mr Gasztowicz QC's costs judgment in 2020, when he ordered the Krishans to repay their costs the Claimant had paid in 2010, it appears that the total costs the Krishans had originally sought in July 2010 was £560,653.80. However, the Krishans contended that only £363,975.60 had been 'paid' by the Claimant, which he ordered the Krishans to 'repay'. Mr Halkerston accepted in his Skeleton Argument the Claimant had actually been paid this, so would have to give credit for £363,975.60 from any damages I awarded. This is because she was 'repaid' something she had never truly 'paid' to the Krishans anyway. It is not disputed and is clear from contemporary documents this was not so much 'paid' by her, as deducted by the Krishans from the Claimant's supposed 'share' under the PSA when the Co-Op and Shops were sold a few months later in March 2011.

313. Indeed, the Krishans acted quickly after the Purle Judgment on 28^th July 2010. Fewer than 6 weeks later by 6^th September 2010, Dr Krishan had reinstructed Ms Smith from Loveitts to proceed to auction. It appears from their letter that it was planned to market the Co-Op for £800,000. However, on 22^nd October 2010, a report showed there was asbestos in the Co-Op and it appears from other emails there was a dispute over the Shops, with neighbours disputing the rear garden and parking at the front. One wonders whether Bill Takhar - who was extremely angry with the Krishans - had pulled local strings to make life more difficult for them. I find it was then that Bill made anonymous NHS complaints about Dr Krishan. Certainly, despite the Purle Judgment, it appears that the Claimant sought to frustrate the proposed sales with notices on the Land Registry and even complained to Gracefield's new bank RBS. Bill even applied for an injunction on 8^th November 2010 to Telford County Court to restrain Gracefield and the Krishans from dealing with or securing monies on the Properties (or the Claimant's home) with a pending auction on 17^th November. However, on 12^th November, HHJ Purle QC in Birmingham granted the Krishans' application and not only directed Bill's application be transferred and dismissed it as totally without merit, but also injuncted both Bill and the Claimant from seeking to register cautions and restrictions at the Land Registry to frustrate the pending sale. This use of Court proceedings enabled auctions to proceed on the 17^th November 2010. Therefore, it is important to note that the Krishans did not just deploy forgery in evidence in their plan to procure the Purle Judgment to confirm Gracefield's ownership of the Properties, they then used the Purle Judgment itself to get an injunction in order to implement their plan to sell the Properties. As shown by the counterclaim declaration then enforced by injunction, for the Krishans, the litigation was not an end in itself, but entwined with their plans.

314. At the November 2010 auctions, the Shops were successfully auctioned for £175,000, with a completion date set initially for January 2011. However, the reserve on the Co-Op of £700,000 was not met. Nevertheless, negotiations continued and on 13^th December 2010 a sale contract on the Co-Op for £675,000 was initially agreed with January completion. However, due to conveyancing complications, the completion date for the Shops was 21^st March 2011 and for the Co-Op was 29^th March 2011, by which time planning permission granted. Accordingly, those sales of the Co-Op and Shops realised a total of £850,000 from which, subject to sale costs, under HHJ Purle QC's declaration, the Claimant would be entitled to £575,000 (£300,000 plus 50% of the net balance). However, from the director's loan account, it appears that £563,650.80 was paid to Wragges from the Claimant's entitlement (in fairness, the same sum as the Claimant later argued - I find correctly - to Mr Gasztowicz QC had been 'paid' by her in costs, although he cautiously adopted the Krishans' figure of £363,975.60). Therefore, the Krishans had not only succeeded in their plan to keep and sell the Co-Op (the property most precious to the Claimant and her family) and Shops, they also managed to retain all the proceeds and also pay their lawyers in full not just 80% from her share. This effectively avoided the 'hit' from the 20% costs reduction - a further entwining of the litigation with their sales of the Properties.

315. Pausing there, I note the sale price for the Co-Op of £675,000 (by which time planning permission had lapsed) is very similar to the March 2011 'pre-works' valuation Ms Dobson came to of £700,000. As I explained at paragraph 105.4 above, unlike her 2011 'post-works' and rental values, for her 'pre-works' valuations, she more simply analysed whether a different approach to the sales could have fetched a higher price. The question is whether with reasonable effort, an extra £25,000 making a total of £700,000 could have been achieved. Certainly, the Chamberlains valuation in March 2009 during the litigation of £215,000 was far too low. As Ms Dobson explained at para 18.17 of her first report, the Co-Op's actual sale price of £675,000 was less than it could have been because it was limited to auction with cash buyers. After the reserve price was not met, it seems that negotiations simply continued with one of the bidders, rather than even going to open auction again, still less marketing the Property openly. I recognise that there had recently been an asbestos report and the auction happened just after the Claimant and Bill had tried to stop it but had been injuncted. But I accept Ms Dobson's opinion that with more effort and less haste, a sale price of £700,000 (only an extra £25,000) could have been achieved very easily. Therefore, I accept Ms Dobson's 'pre-works' valuation for the Co-Op in March 2011 of £700,000.

316. The Shops have a much wider differential between their total sale price of £175,000 in March 2011 and Ms Dobson's valuation of them then of £300,000. However, as she explained in her first report at paras.18.24-18.26 and in evidence as noted at paragraph 241.3 above, the problem was that the Shops had always been seen and were being marketed as a 'job lot' and would have fetched more if sold separately and not limited to cash buyers. By reference to comparable commercial properties, Ms Dobson identified an average value of £80,000, but that totals not her £300,000 (which appears to have taken into account planning permission) but rather £240,000. Whilst this is the same as in April 2006, other terraced properties on the Foleshill Road also had similar values in 2011 as 2006.

317. However, the Cinema was not sold in 2010/11, even though the original planning permission granted on 7^th December 2007 did not lapse until 7^th December 2010. The application to extend planning permission was only made days before it lapsed and the permission was not extended. As a result, there had to be a fresh application, which due to local opposition took another three years and had to change from the originally-granted 18 flats to only 10 flats. As Ms Dobson explained, this reduction in flats also reduced the Cinema's value. So, I accept her view the sale price in August 2014 of £191,000 was not as high as it could have been. Yet, there is no valuation for the Cinema with renewed planning permission in late 2010. However, Ms Dobson showed the 2009 Chamberlains valuation of £165,000 is based on an incorrect estimate of the square-footage, as Ms Dobson showed, so that does not help either. Ultimately, I cannot value the Cinema in late 2010 and I have to proceed on the basis of the value in August 2014. However, the difference between Ms Dobson's valuation of £250,000 then and the actual sale price of £191,000 is explicable because it was auctioned to cash buyers only, not marketed more widely. I accept Ms Dobson's opinion at para 18.22 of her first report that since the Cinema would inevitably have been demolished (as Coventry CC had said back in 2003), a marketed sale would have been open to a wider range of potential buyers with different purchase options, such as an offer conditional on planning permission, or once granted, by mortgage with a proposed lease. Limiting it to cash buyers limited the price substantially. I accept Ms Dobson's opinion that had the Cinema been sold unrestricted in 2014, it would have fetched the price of £250,000 at the least (only £50,000 more than its value in 2006 and only £90,000 more than its value over a decade earlier). However, yet again the Claimant in 2014 received nothing from the Cinema's sale because any 'share' she may have had under the declaration in the Purle Judgment was offset again by Dr Krishan's spurious 'management fee' discussed at paragraph 284 above, as by 2014 the Set Aside Proceedings had begun. In any event, together with £240,000 on the Shops and £700,000 on the Co-Op, the true value of £250,000 for the Cinema in August 2014 means the total value at the times of sale was £1,190,000, not the actual total sale price of £1,041,000.

318. After the draft judgment was circulated, Dr Krishan provided another schedule which after deduction of a slightly higher overdraft figure purports to suggest that from June 2010 to 2019, £44,802.39 of further expenditure was incurred. £16,490.06 of this appears to relate to the sale of the Co-Op and Shops in March 2011; and £16,148.15 clearly relates to the renewed planning application and sale of the Cinema in 2014. So, whilst that total of £32,638.21 clearly relates to the sale of the Properties, the balance of £12,164.18 does not. Instead, it seems to relate to Gracefield's accountancy and tax expenses (suggested by several payments to SB's firm) and given that most of that £12,164.18 relates to the period after the Cinema sale, it may possibly even be linked to the litigation.

319. Finally in my findings of fact, I address Ms Dobsons' valuations of the Properties in November 2022. As I said at paragraph 105 above, those were based on her actual inspection (albeit not inside) of the actual Properties. The Co-Op ground floor (only) had been refurbished and was in use as a shop with an annual rent of £144,000 and had been sold in 2016 for £1,320,000. The Shops had been tidied up and two of them were being used as shops with flats above and no.558 had its subsidence repaired and was a dwelling. Ms Dobson also noted recent comparable sale prices - for example the next-door property to the Shops sold in July 2021 for £202,000. These together with her own inspection in November 2022 support Ms Dobson's 'post-works' valuations in 2022 of £1,150,000 for the Co-Op and £540,000 for the Shops. I explained at paragraph 105.3 above Ms Dobson's 2022 'pre-works' valuations worked backwards from that post-works value by deducting average costs and profit, using industry-standard software in the first report, calibrated against the extra information about the Properties in the second. I accept this is a reliable approach and I accept Ms Dobson's 2022 'pre-works' valuations of the Co-Op at £950,000 and Shops at £380,000. The Cinema is more simple, since in November 2022, it was still 'pre-works' albeit in informal use as a church. Ms Dobson saw it and I accept her valuation of £500,000.

Undue Influence

320. Undue Influence focuses on the transfer of the Properties by the Claimant to Gracefield in March/April 2006 and spans the period from July 2005 until then. In this 'chapter', I first determine the linked and mainly factual questions of the actual terms of transfer and whether fraudulent misrepresentations by the Krishans induced it. Second, I consider whether they can in principle amount to undue influence. Third, I examine whether there must be (and was) a pre-existing relationship of trust and confidence. Fourth, I resolve the Claimant's 'actual undue influence' argument; and fifthly her 'presumed undue influence' argument.

321. The second key question at the start of this judgment was whether fraudulent misrepresentations can amount to undue influence; and if so, whether there needs to be a pre-existing relationship of trust and confidence. In other retrials after a judgment is set aside, the same fraud may have also been central to the transaction previously litigated, leading to a new or re-opened claim for undue influence, although that does not arise here. Yet, there is still a parallel between setting aside a transaction for undue influence (by fraud) and setting aside a judgment for fraud. If 'fraud unravels all', surely fraud inducing a transaction also amounts to 'undue influence' ? Certainly, there are dicta which link misrepresentation with undue influence, including RBS v Etridge (No.2) [2002] 2 AC 773 (HL). However, as Lord Nicholls said there, over centuries Equity developed the doctrine of undue influence in parallel with the common law tort of duress: they did not merge. Likewise, the tort of deceit and the equitable remedy of rescission for fraudulent misrepresentation have not merged, though have stayed in harmony (for example by the latter applying by analogy the statutory time-limit for the former: HMRC v IGE [2021] Ch 423 (CA)). Those careful 'checks and balances' within and between Equity and common law would be disturbed by simplistically 'treating fraud as actual undue influence' (itself contested after Etridge). Unlike the forgery of the PSA in 2008, the alleged 'fraudulent misrepresentations' in 2005-2006 are as yet unproven. So, in this judgment, I take a rigorous approach to (i) the standard of proof on fraudulent misrepresentations; (ii) whether they are proved (to the deceit requirements); if so, (iii) how they fit into 'undue influence' and what 'actual undue influence' means after Etridge; (iv) whether proving undue influence with fraudulent misrepresentations requires a prior relationship of 'trust and confidence'; before (v) my overall conclusions on 'undue influence'.

What were the terms of the agreement to transfer the Properties in March/April 2006 and did the Defendants make fraudulent representations to the Claimant inducing it ?

322. In 2010, undue influence was the main claim before HHJ Purle QC, who insisted misrepresentation was not run, as it was not pleaded in the Particulars. On his findings of fact in the Purle Judgment, including that the Claimant signed the PSA, HHJ Purle QC rejected undue influence and also unconscionable bargain. The latter is no longer pursued before me either as Mr Halkerston accepted that it added nothing to undue influence and in this case I agree. However, I will come back to the role of 'unconscionability' within 'undue influence' itself.

323. However, my own findings of fact are very different from those in the Purle Judgment. So, I must revisit undue influence completely, especially as now (unlike then), 'false representations' are pleaded, but not pursued as torts of misrepresentation or deceit, instead as 'actual undue influence' (with presumed undue influence in the alternative). However, before turning to the key principles, I address the issues of the terms of the agreement to transfer in March/April 2006 and whether it was induced by any fraudulent misrepresentations. That enquiry can encompass later evidence shedding light on parties' intentions at the time: Enal v Singh [2023] 2 P&CR 5 (PC) at [37]. That is different from treating events after a transaction as proof of undue influence, which is impermissible as Lewison J (as he was) said in Thompson v Foy [2010] 1 P&CR 16 at [101]:

"[W]hat I must look at is whether [the claimant] was caused to enter into the transaction by undue influence; and this necessarily means looking at the situation at the time the impugned transaction was entered into, rather than at subsequent events, save in so far as subsequent events cast light on what was happening before and at the time of the impugned transaction. A transaction into which someone enters of their own free will does not retrospectively become tainted by undue influence merely because the counter-party fails to perform his or her side of the bargain."

However, one initial problem I must grapple with is to decide what the 'bargain', or 'transaction' actually was. Clearly, it was the transfer of the Properties from the Claimant to Gracefield in March/April 2006, but what were the terms of it ?

324. The Claimant's primary pleaded case (Consolidated Particulars of Claim ('CAPOC') para 15) had been there was an oral contract between her and the Krishans that: (i) they would set a new company to which the Properties would be transferred; (ii) it would hold them on trust for the Claimant; (iii) it would re-transfer them to her on her demand; and (iv) the transfer was to address the threat of CPOs and make it administratively convenient for the Krishans to manage and refurbish the Properties on her behalf. Indeed, I have found on the balance of probabilities at paragraph 200 above the Krishans did tell the Claimant that whilst the Properties would be transferred to the company to undertake the developments and she had a 50% shareholding, this was only a formality and beneficially the Properties would still belong to her. Moreover, I went on to find at paragraphs 219-221 above, when the Claimant queried SB's letters of 15^th March 2006 which said something different on 24^th March, Mrs Krishan said those letters were just 'hoops to go through to allow them to deal with the Properties' and the £100,000 total price was a 'paper figure': presenting them to the Claimant as a tax/accounting exercise. This reaffirmed her belief that the transfers were only a formality. So, I accept she saw them as what might in lay terms be called 'putting the Properties into Gracefield's name' but that they would 'really still belonged to her' - hardly an unusual arrangement within families. However, she now accepts this 'formality transfer' was not the true contractual nature of the transaction. She also accepts she cannot at the same time argue the Krishans objectively agreed merely 'to be putting the Properties in Gracefield's name', but also that they fraudulently misrepresented that was the true nature of the transaction, which I will consider below as part of the fourth fraudulent misrepresentation claim. The Claimant's belief that the transfers were just a 'formality' is also key to the resulting trust claim. But neither are contractual.

325. Therefore, as Mr Graham fairly said, there was always an inconsistency between the Claimant's pleaded contractual 'agreement' between her and the Krishans and her undue influence case that she was pressurised and/or tricked into the transfers by them. Yet there has also been an inconsistency in the Krishans' case as well. The original pleaded case on behalf of them and Gracefield in the Original Proceedings (Original Defence para.1) was that the true nature of the transaction was in the terms of the PSA, save that 'deferred consideration' was £100,000 (not £200,000 as in the PSA) then 50% to the Krishans and Claimant (less maintenance from her 50%, also not in the PSA). However, HHJ Purle QC did not make a declaration that those were the contractual terms, but instead that the terms were those in the PSA (quoted at para.228) but with the Krishans having the other 50% profit share. In other words, he found the 'terms of the transaction' were the Claimant would transfer the Properties in return for (i) £100,000 on her Gracefield director's loan account, (split between £30,000 for the Shops, £30,000 for the Cinema and £40,000 for the Co-Op), to be paid on the completion and sale of each site; (ii) £200,000 'deferred consideration' payable on the completion and sale of each site (split £60,000 for the Shops at £20,000 each, £60,000 for the Cinema and £80,000 for the Co-Op); (iii) 50% of the profits of sale to the Claimant; with (iv) the other 50% of profit share was for the Krishans. Since that last element is not actually part of the PSA, I will call these the 'PSA Plus' terms. Those are what the Krishans still maintain were the true terms of the transaction.

326. However, I have found (at paragraph 229) that the Claimant never agreed the PSA or a 50% profit share as it was never discussed with her. Therefore, what was found in the Purle Judgment to have been the nature of the transaction has been undermined first by the Gasztowicz Judgment finding the Purle Judgment was procured by fraud and secondly now by my own findings that the Claimant did not agree the PSA (or indeed, the 'PSA Plus' terms). I found (as summarised at paragraph 229 by reference to earlier findings) that in Mr Davies' note of 16^th November 2005, the '50/50 share' was consistent with the Claimant and Krishans' agreement to have a 50% shareholding in Gracefield and to split 50/50 the profits of renting the Properties (after payment of Gracefield's / the Krishans' costs). This is borne out by the absence of reference to a '50/50 profit share on sale of the Properties' in SR's note of what Dr Krishan said on 18^th November 2005, or the 2006 notes of SB on 20^th January or even 20^th February. This is also consistent with SB's letter to the Claimant of 15^th March (quoted above at paragraph 220). That letter only mentions the £100,000 'purchase price' (described there and in the PSA as the value of the CPOs) credited to the Claimant's loan account and the £200,000 which SB's letter describes as a 'profit share'. However, as £200,000 was the balance of the agreed (supposed) market value of £300,000, it is better described as 'deferred consideration', as it was in the draft PSA. Nor was any 'profit share' (or indeed even any 'deferred consideration') mentioned in the transfers. The first appearance of the '50% profit share' was in the draft PSA itself that as noted at paragraph 229 above included a 50% share for the Claimant but not the Krishans. As a result, I also found that they neither signed it themselves, nor gave a copy to the Claimant to sign. So, I found the 'PSA Plus' terms were never actually agreed with the Claimant even if they reflected SB's own (mis)understanding of the deal.

327. Indeed, if one just focusses on the contemporary documentation seen by all parties, one might think the true terms were 'the transfer terms' set out in the transfers themselves (i.e. sale of the Properties for £100,000); or the terms of SB's 15^th March letter to the Claimant, also copied to Mrs Krishan (and doubtless seen by Dr Krishan). What I will call these '15^th March letter' terms were that the £100,000 'purchase price' would be paid to the Claimant's director's loan account in Gracefield and the £200,000 (albeit as 'deferred consideration' rather than 'profit share'), with no explicit 50% profit share. Since on this basis Gracefield owned the Properties, that would mean that if the Properties were sold for at least £300,000 in total, the Claimant would get that and Gracefield the 'profit', to be distributed as its then directors and shareholders saw fit. I emphasise 'then', not as the Claimant was in fact ousted by the end of 2006 - as later events are not relevant: Thompson. The point is that directorships and shareholdings can always change and so on this basis, any 'profit share' for anyone was non-contractual.

328. So, if it were open to me, I would find either the '15^th March letter terms' were the true objective terms of the transaction. Certainly, for presumed undue influence, whether the terms of the transaction 'call for explanation' so as to raise the presumption is assessed objectively as Mr Perring submitted, relying on p.11-010 of Professor Enonchong's excellent work 'Duress, Undue Influence and Unconscionable Dealing' (2023) 4^th Edition (to which I return repeatedly below). That is not the same as assessing objectively what the terms of the 'transaction' actually were, but it would be analytically inconsistent if that was not done. Indeed, that would also be consistent with the contractual principle that the terms of a contract are determined objectively, not subjectively (Chitty on Contracts (2023) 35^th Ed paras.4-002-3). Undue influence is also a part of contract law.

329. However, I do not believe this conclusion is fairly open to me as the '15^th March transfer terms' were not 'put' in cross-examination either to the Krishans or to the Claimant: see Rea v Rea [2024] EWCA Civ 169 at [52]. Since the Claimant now only pursues the 'formality transfer' terms as a fraudulent misrepresentation not the true terms of the agreement, that leaves me with the 'PSA Plus' terms which I have found she was not aware of, let alone agreed. Nevertheless, in fairness to the Krishans and Mr Graham who addressed me on the 'PSA Plus' terms, I focus on these for both 'presumed undue influence' and 'actual undue influence', although 'cross-check' my conclusions with the 'the 15^th March letter terms' and 'transfer terms'. If the result is the same, the issue is academic. Moreover, as Mr Halkerston said, 'actual undue influence' turns on alleged 'fraudulent misrepresentations', so I consider those before wading into the more complex legal question as to whether they can amount to 'actual undue influence'.

330. The five alleged fraudulent misrepresentations are effectively pleaded as such, as paragraph 10 'CAPOC' states they 'untrue and known to be so by the Krishans' at paragraph 11. I will summarise them and the pleaded facts at paragraph 12:

(i) The Properties were subject to or likely to be subject to CPOs;

(ii) The Properties were worthless, or alternatively worth £100,000, because of the CPOs or the threat of them;

(iii) If the CPOs, or the threat of them, could be removed, their value would increase to £300,000.

(iv) If the Claimant agreed to transfer the Properties to a company, the Krishans would take steps to ensure that the CPOs or threat of them were removed; and refurbish and manage the Properties on her behalf and for her benefit;

(v) The proposed transfer was intended to be an 'act of charity' for the Claimant who was Mrs Krishan's cousin and in financial difficulties.

The pleaded facts said to support fraud were that the Krishans were experienced developers who knew or would have investigated and discovered the following facts: (1) the Properties were not subject to CPOs and the risk of them was remote; (2) even if CPOs were made, the Claimant would be entitled to their market value; (3) the Properties were in fact worth much more than £300,000 (whilst the pleaded values are more than Ms Dobson's valuation of £890,000, that is 'much more than £300,000' in any event); and (4) in any event, the proposed transfer was intended to benefit the Krishans not the Claimant, as shown by later events.

331. I made findings of fact above at paragraphs 190-200 above as to what the Krishans told the Claimant in Summer-Autumn 2005 and at paragraphs 208-230 above as to what they told her in January-April 2006. However, at that stage I did not decide whether they were fraudulent misrepresentations because as I said at paragraph 84 above, a conclusion of fraud is usually a matter of inference from the primary facts, as Lord Millett said in Three Rivers at [186] (quoted above and in Kekhman at [42]). As I said there, Lord Millett continued by saying:

The facts pleaded I have just summarised above are certainly clear enough to amount to fraud if proved. As also noted, in Arkhangelsky at [42] Vos C said:

"[When Lord Millett] said it was not open to the court to infer dishonesty from facts which have been pleaded but are consistent with honesty, he was not laying down a general rule that can affect a case like this where there were multiple allegations founding an inference of dishonesty, many of which are themselves allegations of dishonesty that have been proven."

Any inferences of fraud also require assessment of all primary facts, given Vos C's encouragement in Arkhangelsky at [59] (quoted at paragraph 79) to 'stand back and consider the effects and implications of facts found taken in the round'.

332. As Males LJ added in Arkhangelsky at [117] and [120] (the latter quoted above at paragraph 83), while the starting-point is that fraud or dishonesty are inherently improbable, once other such findings have been made against a party, the inherent improbability of his having acted fraudulently or dishonestly in the respect alleged may be much diminished. Yet, as discussed at paragraph 84, the 'Lucas direction' is that if someone has committed fraud in another respect, that does not prove they have committed fraud in a different respect alleged. As stressed in Kekhman, Privalov and Otkritie (also quoted at paragraph 83 above), even if there are other findings of dishonesty, there is still a need for cogent evidence of fraud to be satisfied on the balance of probabilities it occurred. Here, the Krishans were found in the Gasztowicz Judgment to have been dishonest in relation to the PSA forgery, reducing the 'inherent improbability' of further dishonest conduct. Moreover, I have found the Krishans' evidence seriously unreliable on other aspects like the Balber Takhar Account, the forged JS Invoice and Options for Gracefield. Nevertheless, it does not mean the finding of dishonesty is evidence of fraudulent misrepresentations, still less does it prove them as stressed in Lucas.

333. Moreover, there is no alternative case of negligent or innocent misrepresentation, which is not pleaded. So, it would be just as unfair on the Krishans, having faced an allegation of fraud, to be found to have misrepresented negligently (still more innocently), as it would be to find dishonesty when not alleged, as Lord Millett said in Three Rivers. This is particularly true given the now-dropped deceit claim was bound to fail on limitation. It was only ever pleaded in relation to the transfers in March/April 2006, so under s.2 Limitation Act 1980 ('LA'), limitation expired in April 2012. However, the deceit claim was only issued in March 2015. The Claimant has dropped her 'relation back' argument, rightly as I said at paragraph 33 above. The Claimant's only other argument was s.32 LA, but that only stops limitation running on an action based on fraud of the defendant until the fraud could have been discovered with reasonable diligence. Unlike on the conspiracy claim below, the relevant 'fraud' in the deceit claim was the alleged fraudulent misrepresentations up to 2006. As Mr Perring said, the Claimant alleged those were fraudulent back in 2008 but chose not to plead it. Limitation expired in 2014.

334. For those reasons, I consider I should hold the Claimant to her factual pleading of fraudulent misrepresentation, assessed at the legal standard of what she pleaded it as: deceit. Indeed, there is a close analogy between the elements of common law deceit and for equitable rescission for fraudulent misrepresentation: IGE, which is in turn analogous to equitable rescission for undue influence. I gratefully take the elements of deceit from Mr Graham and Mr Perring's original skeleton: (1) the Krishans made a false representation by words or conduct to the Claimant; (2) they did so 'fraudulently' (which I explain below); (3) they intended the Claimant to act on it; and that (4) she was induced to do so and so suffered loss: Bradford Third Equitable Benefit BS v Borders [1941] 2 All ER 205 (HL) at 211. If a representee acts as the fraudulent representor intended them to act, they cannot deny 'materiality': Versloot v HDI [2017] AC 1 (SC) [31] (indeed they need not even believe in its truth: Zurich v Hayward [2017] AC 142 (SC) at [18]), although lack of materiality or belief is relevant to inducement in fact: Barings v Coopers & Lybrand [2002] BCLC 410 at [117]. On the third element of 'fraud', Lord Herschell explained in Derry v Peek (1889) 14 AC 337 (HL) 374:

"First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made."

335. However, since deceit cannot be pursued, that begs the legal question whether fraudulent misrepresentation with those same elements as the tort of deceit can itself amount to 'actual undue influence', which I consider below. However, despite the fact that this was not pleaded, this is not suggested to give rise to any limitation issue. In Anullment Funding v Cowey [2010] EWCA Civ 711 at [54] it is made clear even if undue influence is originally pleaded as 'presumed', it is open to the Court to find proven 'actual undue influence' on the evidence.

336. For context, I first very briefly summarise my findings of fact relating to Summer 2005 at paragraphs 167-170 and 190-191. At Bobby's meeting with Coventry CC on 30^th June 2005, he was told the Council and Donaldsons did not consider his proposed 'community uses' for the Properties realistic but would look into using the Co-Op as a health centre and did consider the Cinema a viable development opportunity. Coventry CC said they would 'start the process leading to CPOs being made available' but they were an 'absolute last resort'. Bobby told the Claimant what happened and he needed her written authorisation. The Claimant told Mrs Krishan this on 2^nd July 2005. Mrs Krishans persuaded her to authorise Dr Krishan rather than Bobby and sign a letter Mrs Krishan wrote on 4^th July.

337. The first pleaded false representation made by the Krishans to the Claimant is that they told her that the Properties either were subject to CPOs or were 'likely' to be. On that issue, I have found the Krishans said different things at different times:

337.1 Firstly, for July and October 2005, at paragraphs 194-196.1 above, I found on the balance of probabilities the Krishans told the Claimant that 'CPOs had been applied on the Properties' which 'meant they could be snatched away from her leaving only liabilities' and 'she could be left 'penniless' and 'homeless' and also that 'it was essential to remove the CPOs to protect their value' which as underlined is an unequivocal statement there were in fact CPOs. So, I found the Krishans stated as a fact that there were CPOs on the Properties (in effect, that they were 'subject to them' in the pleaded expression at para.10(a) CAPOC). I also found at paragraph 192 that Dr Krishan and through him Mrs Krishan knew full well that CPOs were still a 'last resort' for the Council. On all the evidence, I am satisfied on the balance of probabilities that the Krishans deliberately told the Claimant there were in fact CPOs on the Properties when they knew there were not, in order to get the Claimant 'off the fence' and to agree to transfer them.

337.2 However, I added at paragraph 196.2 above that, even if I was wrong about that and the Krishans did not say the Properties were actually subject to CPOs, I found they also exaggerated both the likelihood and consequences of them. They worried the Claimant by suggesting that CPOs could result in her being made 'bankrupt', 'homeless' and even being in 'prison', as with the occasion when Bobby was present, quoted at paragraph 186 above. I find on the balance of probabilities the Krishans both knew (through Dr Krishan) that was wrong, as a CPO entitles an owner to full market value less debts and for the Council, aside from starting to 'investigate' s.215 notices on the Cinema, CPOs still were a 'last resort'. Accordingly, I also find on the balance of probabilities that the Krishans knew that CPOs were very unlikely, yet I find they deliberately exaggerated their likelihood.

338. Pausing there, conscious of the cogent evidence required for a finding of fraud, even with a previous finding of fraud in a different respect, I find on the balance of probabilities that either way, the Krishans made fraudulent misrepresentations. Whilst Dr Krishan's knowledge is not to be imputed to Mrs Krishan or vice versa, on my all my findings of fact, they always 'worked as a team' and I find shared all relevant information with each other, but did not do so with the Claimant:

338.1 On the basis of my finding at paragraphs 196.1 and 337.1 above that the Krishans told the Claimant (not Bobby) that 'CPOs had been applied on the Properties' in the sense that they were subject to CPOs, knowing that in fact there were not, this was a straightforward fraudulent misrepresentation. By reference to the principles summarised at paragraph 334 above, the Krishans made a false statement of fact ('that CPOs had been applied on the Properties'), which they knew to be false (Derry), intending the Claimant to believe and act on it by transferring the Properties, which she later did. So, they cannot deny materiality (Versloot), or inducement as the fraudulent misrepresentation was one operative cause of the Claimant's agreement (Zurich), since I accept her reasons for agreeing to transfer in November 2005 (that I will accept remained in April 2006) in her statement:

"I felt trapped. I was too afraid I would lose the Properties to the Council and end up, as the Krishans described it, 'penniless and homeless'....[W]hat the[y] were offering was exactly what I needed help with - they seemed to be offering a perfect solution to my problems, [as] I could both ensure the Properties were put back into good condition, but also keep them in the ownership of me and my family. So, I eventually agreed to accept their help." (my underline).

338.2 Even if I am wrong about that, on the basis of my finding at paragraphs 196.2 and 337.2 above, the Krishans deliberately exaggerated the likelihood and consequences of CPOs being made, rather than reassuring the Claimant with the truth that CPOs were a 'last resort' and anyway would entitle her to full market value less debts. There is a difference in misrepresentation between exaggeration and outright falsehood and Mr Graham questioned whether an opinion as to whether CPOs were 'likely' was representation as opposed to forecast. Whilst he did not refer to it, this point is supported by the case of RBS v Chandra [2011] EWCA Civ 192 which held a wrong but genuine forecast of the future was not 'misrepresentation'. However, at [26] and [39] of Chandra, Patten LJ contrasted that with conscious deception or misleading explanations. I find there was a stark gulf between what the Krishans knew to be true about CPOs being a 'last resort' and the apocalyptic scenario Bobby recalls them giving him and the Claimant. So, I find on the balance of probabilities these were knowingly misleading misrepresentations by the Krishans as to the current or future likelihood of CPOs (or they were at least reckless) and so fraudulent: Derry, which were intended to and did induce the transfers in the same way as I have said.

339. In any event, irrespective of my findings for 2005, in respect of January-April 2006, I went on at paragraphs 211-230 above to find on the balance of probabilities the Krishans deliberately told the Claimant there were in fact CPOs on the Properties knowing there were not, in three different (and cumulative) ways, which in addition I find all amounted to fraudulent misrepresentations:

339.1 Firstly, I found at paragraph 213 that Dr Krishan told SB that the Council had made CPOs on the Properties and placed the value on them of £100,000. That was plainly a fraudulent misrepresentation because it was a false statement of fact made knowing it was false with the intention to induce reliance on it - in short, a lie. Moreover, I went on to find at paragraph 214 above the Krishans told the Claimant that CPOs had been made prior to the meeting on 20^th February. Whilst she could not recall that meeting and does not specifically mention being told that, it is entirely consistent with her evidence that the Krishans maintained their lie that there were in fact CPOs on the Properties meaning they were only worth £100,000 and I find on the balance of probabilities the Krishans repeated the same lie to the Claimant directly as Dr Krishan told SB. They knew it was false, intended her to rely on it to transfer the Properties and she did.

339.2 Secondly, whether or not the Krishans told the Claimant that, I have found at paragraphs 214-215 and 220 they told SB that and she told the Claimant, both in the meeting of 20^th February (which the Claimant could not recall) and SB's letter of 15^th March, that she eventually accepted she had received. That letter said: 'we are transferring the properties in at the value of the compulsory purchase order rather than the true redevelopment value'. This was an innocently false representation by SB, based on a fraudulent misrepresentation by the Krishans. As explained by Prof. Cartwright in 'Misrepresentation, Mistake and Non-Disclosure' (2022, 6^th Ed) para.5-07 (by reference to authorities including Borders, referred to in Mr Graham's and Mr Perring's original skeleton) a defendant may be liable for misrepresentation made on their behalf if they have the requisite knowledge e which I find the Krishans plainly did and intended the Claimant to be told.

339.3 Thirdly, even if I am wrong about that, at paragraph 221 above I found on the balance of probabilities that on 24^th March 2006, when the Claimant asked Mrs Krishan about SB's letters of 15^th March (which as I say referred to the CPOs as having been made), Mrs Krishan said words to the effect of the transfers had to be done 'to save the Properties'. That way, Mrs Krishan reaffirmed SB's statement that there were CPOs by saying transfer was necessary to 'save the Properties' from them. Mrs Krishan knew full well there were no CPOs (indeed they were not even 'likely') and that transfer was certainly not necessary to 'save the Properties'. This was a lie - indeed a fraudulent misrepresentation which induced the Claimant to transfer the Shops the following week and the Co-Op and Cinema the following month.

On any and all these various bases, I uphold the first fraudulent misrepresentation.

340. I turn to the closely-linked second pleaded false representation, namely that the Krishans told the Claimant that due to the threat or making of the CPOs, that the Properties were 'worthless' or alternatively worth only £100,000. At paragraph 198 above, I noted Mr Graham accepted that if the Krishans had told the Claimant that the Properties were worth £100,000 because of the CPO, that would be a misrepresentation, even if innocent. Whilst he submitted against that finding, I found on the balance of probabilities that between July and November 2005, the Krishans told the Claimant due to the threat of CPOs, the Properties were only worth £100,000 and told her given her debts were 'worthless' to her because;

340.1 Firstly, this is just what Mrs Krishan said in the 2008 covert recordings:

"....[B]y the time you paid everything back...they were actually worthless on paper.....I know you like to think that, yes, you know, they are there, but they are actually worthless.." (my underline)

Mrs Krishan was there saying that the Properties had been worthless due to her debts in 2005 (whether or not saying they were still such in 2008).

340.2 Secondly the Krishans were therefore not telling the Claimant the Properties had no intrinsic value - they plainly did of at least £300,000. Instead, they said they were 'worthless to her' after her debts, as Mr Graham argued was true. But as he also said, they all agreed they were worth £300,000, yet her modest debts were c.£35,000, so they plainly were not 'worthless to her'.

340.3 Thirdly, as just discussed, I found at paragraphs 213-214 above that Dr Krishan told SB that '£100,000 was the value of the Properties subject to a CPO': consistent with what they told the Claimant in 2005.

340.4 Fourthly, it is totally implausible that the Claimant came up with a valuation of £100,000 under a CPO which the Krishans simply accepted and relayed to SB. The Claimant knew that flatly contradicted the valuations Bobby was given on 30^th June and she had also entrusted Dr Krishan with dealing with the Council on her behalf and relied on what he told her. Therefore, I find it more likely than not that he came up with the £100,000 value himself.

340.5 Fifthly, this discussion of the Properties being 'worthless' to the Claimant was bound up with the dire threats of 'bankruptcy' and 'homelessness', yet given she not only owned her own home mortgage-free but could have easily solved all her financial problems and created a 'development pot' for the Co-Op just by selling the Cinema, all that was extremely unlikely.

341. Therefore, having made that finding, as Mr Graham concedes, that is a misrepresentation. Moreover, I find it was plainly fraudulent, as Dr Krishan accepted he knew that a CPO entitled the owner to full market value (which he considered to be £300,000) less debts (which he thought at the time were only c.£15,000). He did not suggest he did not know about that rule at the time, as SB said. Indeed, he said SB got it wrong about the '£100,000 CPO Value'. So, when telling the Claimant that, he must have known it was wrong (or at least been reckless about it - Derry). Again, I find Mrs Krishan is in the same position, as they shared all relevant information and 'worked as a team'. In short, they both lied to the Claimant and that was one operative cause of her transferring the Properties. So, I also uphold the second fraudulent misrepresentation.

342. The position is even clearer in January-April 2006, for similar reasons as for the linked first fraudulent representation. By February 2006, I found the Krishans were not just telling the Claimant that due to the threat of CPOs the Properties were only worth £100,000 so 'worthless to her', they were also telling her directly and through SB that £100,000 'was the value of the CPO'. I find on balance of probabilities the Krishans expanded their earlier lie to the Claimant into a bigger lie that the Council had not just made CPOs but fixed the price at £100,000 and indeed as Mrs Krishan said to the Claimant on 24^th March, transfer was needed to save them. That is an entirely separate reason for finding the second fraudulent misrepresentation proved (like for the first fraudulent misrepresentation, whether the terms of the transaction were 'PSA Plus' or '15 March letter' is irrelevant).

343. The issue with the third pleaded false representation - that if the CPOs or their threat could be removed, the value of the Properties would increase to £300,000 - is again linked. There is a shorter and a longer answer:

343.1 The shorter answer is that I have found on the balance of probabilities at paragraphs 196.1 and 198 above the Krishans together told the Claimant that the Properties were 'worthless' and 'it was essential to remove the CPOs to protect their value' and I have also found at paragraph 197.1 that Dr Krishan told the Claimant the £300,000 value. In any event, I also found at paragraphs 213-214 above that the Claimant was told by the Krishans, directly and indirectly by SB that the 'market value' of the Properties was £300,000, but their 'CPO Value' was only £100,000. That is essentially saying without the CPOs, the value of the Properties would increase from £100,000 to £300,000. But the Krishans knew their value was not £100,000 in the first place. So, saying that was a fraudulent misrepresentation of fact.

343.2 However, the Krishans may object this avoids the real issue: which is whether they fraudulently misrepresented the value of the Properties in April 2006 as £300,000 knowing they had a higher actual market value. As Prof. Cartwright explains in 'Misrepresentation' at para.3.18, expressing an opinion without honest belief in its truth is a misrepresentation of fact that opinion is genuinely held. The starting point is that at paragraph 197.1 above, I found on the balance of probabilities that Dr Krishan not the Claimant came up with the 'market value' of the Properties of £300,000. It is true I accepted at paragraph 197.2 above that the Krishans would not have realised the Properties in late 2005 were worth something like £890,000 as Ms Dobson assessed and I find for April 2006, (although I found in late 2005 extrapolating back, the Properties' true market value was much higher than £300,000). However, as I found at paragraphs 213-214 above, Dr Krishan told SB and through her the Claimant in late February 2006 that the actual market value was still £300,000. I find on the balance of probabilities that just as in April 2006, in late February 2006 the Properties' actual market value was £890,000. However, the real question is whether by the time Krishans were telling the Claimant directly and through SB that the market value of the Properties was (still) £300,000, they knew that opinion was false, had no honest belief in its truth or were reckless as to that, including 'blind-eye knowledge' (Derry). Despite presenting himself in August 2005 to the PCT as an experienced developer, Dr Krishan continued to fail to get valuations by Spring 2006. I find on the balance of probabilities that by late February 2006, Dr Krishan knew either actually or on a 'blind-eye' basis that the Properties were worth a lot more than £300,000 (even if he did not know they were worth as much as £890,000) which is why he deliberately did not get valuations. I would also find that Mrs Krishan either knew that through her husband or was reckless as to its truth when she commented on SB's letter of 15^th March to the Claimant that £100,000 was a 'paper figures' (see paragraph 221). These fraudulent misrepresentations were intended to be believed by the Claimant and also induced the transfers soon afterwards so were material (Versloot).

Either way, I uphold the third fraudulent misrepresentation as well. Again the 50% profit share is irrelevant and so my conclusion would be the same whether the terms were the 'PSA Plus' or '15^th March letter' terms.

344. I turn to the fourth pleaded false representation: that if the Claimant agreed to transfer the Properties to a company, they would take appropriate steps to ensure CPOs or threat of them were removed; and refurbish and manage them on her behalf for her benefit. This differs than the first three fraudulent misstatements of current fact (including on the third, as I have found a fraudulent misrepresentation of the fact of the Krishans' opinion). By contrast, the fourth does relate to the terms of the transaction itself - or at least their future intention. This differs from Chandra on forecast of future events. Prof. Cartwright says in Misrepresentation at paras.3-44-45, an honest statement of current intention about future conduct is a prediction or a promise, but not a misrepresentation as you cannot know in fact what you will do. But a lie about your current intention about your own future conduct is a fraudulent misrepresentation as to your own current state of mind. As Bowen LJ famously said in Edgington v Fitzmaurice (1885) 29 Ch D 459:

"[T]he state of a man's mind is as much a fact as the state of his digestion. ...A misrepresentation as to the state of his mind is a misstatement of fact."

It is helpful to tease apart intention to remove the CPOs or their threat on one hand; and to manage the Properties for the Claimant's benefit on the other.

344.1 The first strand is that the Krishans told the Claimant they would take appropriate steps to ensure the CPOs or the threat of them were removed. I accept that although CPOs were a 'last resort', there was a very minor risk, revisited by Coventry CC regularly in 2005 through to 2007. It is also clear that CPOs were never made. However, the point is not whether Dr Krishan successfully avoided CPOs from April 2006 onwards. It is that for the reasons discussed under the proven first fraudulent misrepresentation, in 2005, both Krishans lied to the Claimant that there were in fact CPOs that required 'removal' and in February-April 2006 that the Council had made CPOs fixing the value at £100,000. So, this strand of the fourth fraudulent misrepresentation is proved, but it adds little to the first misrepresentation.

344.2 The second strand - the intention to refurbish and manage the Properties on the Claimant's behalf and for her benefit - as Mr Graham says, is vague. He submitted it must mean the Claimant alleges she was told the Properties would be refurbished and then let; whereas the Krishans' real plan was sale. It is certainly clear that sale was always the Krishans' plan, as Dr Krishan told SR as early as 18^th November 2005. Yet I have also found that there was no reference to onward sale of the Properties in front of the Claimant (with which they knew she disagreed) with Mr Davies in November 2005 (paragraphs 203-4), in SB's January meeting (paragraph 208) or in her February meeting (paragraph 215). This is one reason (as I found at paragraphs 220-1) when the Claimant received SB's 15^th March letters, she questioned it with Mrs Krishan, who said it had to be done to save the Properties. Standing back from these findings, I may well have drawn the inference that this was not just an omission by the Krishans to mention their plans to sell the Properties in front of the Claimant, but the deliberate concealment of their plan from her. However, I do not recall this factual point being put to the Krishans in cross-examination, so again it would be unfair to the Krishans make this finding: see Rea at [52]. In any event, concealment is not fraudulent misrepresentation: Bradford at 211.

344.3 In any event, the pleaded second strand of the fourth alleged fraudulent misrepresentation is that the Krishans told the Claimant that if she transferred the Properties to a company, they would refurbish the Properties and manage them on her behalf and for her benefit. As I found at paragraphs 199-200 above, the Krishans repeatedly told the Claimant all that. However, the Krishans did have a genuine intention to refurbish and manage the Properties; and indeed, 'on behalf of' the Claimant, in the sense of 'instead of' her. The real issue is whether in telling the Claimant they intended to manage the Properties 'on her behalf and for her benefit, the Krishans fraudulently misrepresented at the time their current intentions as to the future, as in Edgington. (Prof Cartwright in Misrepresentation at para.3.44 gives the useful example of East v Maurer [1991] 1 WLR 461 (CA), where the vendor of a hairdressing salon deliberately misrepresented his intention not to work full-time at his nearby competing salon). I remind myself very often genuine intentions go astray, so I do not place weight on what the Krishans later did in ousting the Claimant from Gracefield later in 2006, let alone in 2008. However, aside from the modest financial support of maintenance of £400pcm and payment of bills on the Properties the Krishans started giving the Claimant when she agreed in principle to transfer in November 2005, on all my findings of fact on the period from July 2005 to April 2006 at paragraphs 190-230, I would find on the balance of probabilities that the Krishans did not genuinely intend to benefit the Claimant, but rather to benefit themselves at her expense. (I will develop that below in my conclusions on undue influence). Indeed, this conclusion is affirmed by the response of Mrs Krishan on 24^th March 2006 to the Claimant querying SB's letters, as I found at paragraph 221 above. I found on the balance of probabilities that Mrs Krishan told the Claimant that SBs' letters contained 'paper figures' and the formalities she described were 'just the hoops they had to go through to allow them to deal with the Properties on her behalf' etc. In short, I also found at paragraph 221 above that Mrs Krishan was presenting the transfers as a tax/accounting exercise, even though in reality - and for SB - it was not as I found at paragraph 215. I also find on the balance of probabilities that Mrs Krishan knew this was false - she was using the Claimant's implicit trust in her to mislead her about the Krishans' real intentions to manage the Properties for their own benefit not the Claimant's (with similar fake intention as Edgington and East) and the real nature of the transfers. This was knowingly false on the Derry test, let alone recklessly. Both were material, operative causes and/or 'induced' the Claimant into the transfers, of the Shops about a week later and the Co-Op and Cinema about a month later, which the Claimant was 'steered' through by Mrs Krishan with further lies about the 'necessity' of the transfers to save the Properties found at paragraphs 222 and 230 above.

Therefore, I also uphold all of the fourth pleaded fraudulent representation.

345. However, I reject briefly the pleaded fifth false representation - that the Krishans said the transaction would be 'an act of charity'. I accept the Krishans had said from July to November 2005 - as I said at paragraph 204 above, it went hand in hand with their suggestion their help was 'payback' for the support the Claimant had given Mrs Krishan. However, by November 2005, the Claimant knew the Krishans would also benefit from the transfers, so they were not 'acts of charity'.

346. However, for the avoidance of doubt, my rejection of the fifth fraudulent misrepresentation does not affect the following important conclusions:

346.1 Firstly that as just explained, I have upheld the first four pleaded fraudulent misrepresentations (the fifth was always rather a 'makeweight'). I make clear that those were individual findings. Even if I am wrong about one or more, I would maintain the other conclusions were right on the evidence.

346.2 Secondly, for the reasons I explained in my earlier findings of fact (including paragraphs 149, 157, 170, 188, 199-204, 210, 215 and 221), I find on the balance of probabilities that the Claimant did not want to sell the Properties, even though that was the logical thing to do. She saw then as 'family properties' which really belonged to her and Bill (albeit not Ian, with whom Bill was in dispute about them) and which she was responsible for. This explains her dismay (which I have found at paragraph 250 above) in March 2008 when she discovered the Krishans were auctioning the Co-Op - indeed, behind her back. Indeed, the Co-Op for the Takhar family was the 'jewel in the crown', as Bobby put it (see paragraph 119), but he and the Claimant were more pragmatic about the derelict Cinema: 'Bill's dream'. The Krishans knew the Claimant did not want to sell, which is why Mrs Krishan said in the covert recordings 2008 (paragraph 121 above) that she knew the Claimant really did not want to lose them and whilst they 'had no vested interest in the Properties, she knew she did as it was her life'.

346.3 The same applies even more clearly to the Claimant's belief and intention (which I found as a fact (at paragraphs 200-203, 208, 211-215, 218 and 221) that after the formal transfers of the Properties 'into Gracefield's name', she intended they would really still belong to her (and Bill). That is why she repeatedly sought assurance about it and did not agree until she had Bill's blessing; what she believed was being discussed with Mr Davies and SB; and why she was concerned about SB's letters but reassured by Mrs Krishan on 24^th March 2006 that those letters were just 'paper figures' and 'hoops': effectively a tax or accounting exercise which she accepted as 'not a numbers person'. Even if I am wrong about that, the disclosure of 'profit share' on sale in SB's letter was not inconsistent with the Properties staying in the Claimant's beneficial ownership if in Gracefield's name until that sale, especially as the Claimant would get up to £300,000 of the proceeds first, the destination of the balance of the proceeds was not clear and on the face of it would go to Gracefield (see paragraph 229 above).I will return to that in a moment on the actual undue influence claim. However, the Claimant's intentions for the beneficial ownership of the Properties following transfer to Gracefield is also key to the resulting trust claim.

347. Turning back to the first four fraudulent misrepresentations I have found proved, I would make three general points. The first is that, as I have said, they reflect the combination of Dr and Mrs Krishan working together as a team; and the combination of both 'carrot' and 'stick'. Dr Krishan was more responsible for the 'stick' and used his position as the Claimant's representative with the Council to misrepresent the Council's position e.g. CPOs had been made or were 'likely', the Properties being 'worthless', or only worth £100,000 rather than £300,000 on the open market. He was also responsible for the 'carrot' of the first strand of the fourth fraudulent misrepresentation: that he could save the Properties from that. Broadly, Mrs Krishan was more responsible for the 'carrot': exploiting the Claimant's implicit trust in her to reassure her they would manage the Properties for her benefit and the transfer was just a formality. But she could occasionally wield the 'stick' as well as the 'carrot' e.g. by her own references to the CPOs.

348. The second point is that this overall 'rescue narrative' not only lasted for nine months between July 2005 and April 2006, it also subtly developed over that time. I have found that the Krishans' 'stick' of both the first and second false representations took different forms in Autumn 2005 and Spring 2006, the latter using the involvement of SB. However, the Krishans also developed their 'carrot'. In Autumn 2005, Mrs Krishan took the Claimant away to Spain and reassured her doubts about the transfers with the fourth fraudulent misrepresentation that they would manage the Properties for her benefit. Yet, when SB in March 2006 talked in terms of 'sale' of the Properties, Mrs Krishan used the Claimant's implicit trust in her to soothe her concerns about SB's March letters as 'paper figures' and 'hoops'; and to steer her through the transfers over the next month.

349. The third point is the Krishans' 'rescue narrative' took as long as it did because it had to wear down the Claimant's reluctance to accept help and to transfer the Properties from July to November 2005, after which, as she said in her statement:

"I felt trapped. I was too afraid I would lose the Properties to the Council and end up, as the Krishans described it, 'penniless and homeless'...[And] they seemed to be offering a perfect solution to my problems, [as] I could both ensure the Properties were put back into good condition, but also keep them in the ownership of me and my family. So, I eventually agreed...."

Nevertheless, it still took another five months to complete the transfers. Yet I find on the balance of probabilities but for the Krishans' fraudulent misrepresentations to the Claimant I have upheld, she would not have transferred the Properties:

349.1 Firstly, the Krishans' fraudulent misrepresentations need to be seen as working synergistically in the way the Claimant explains in that quote. Together, they wore down her resistance to the Krishans' plan until in November 2005, the Claimant agreed in principle. Dr Krishan then instructed the professionals but also fed them the same 'rescue narrative' the Claimant had been fed so that she was carried like a passenger through the meetings (rather than shut out which may have prompted her objection - as the Krishans forgot in the auction in early 2008). Mrs Krishan 'shepherded' the Claimant through the process by drafting letters for her to sign; and reminders of fraudulent misrepresentations to keep the Claimant 'on track' on 24^th March 2006; and on the signing of the transfers.

349.2 Secondly, even if I am wrong about that, even ignoring the fraudulent misrepresentations I have found in 2005, the re-iteration of all four fraudulent misrepresentations in 2006, especially from February to April alone, were sufficient to induce (and cause) the Claimant to transfer the Properties, which was precisely the Krishans' intention in making them.

349.3 Thirdly, even if I am wrong about that, since fraudulent misrepresentation here operates through the equitable doctrine of undue influence, the Claimant does not have to prove that but for those misrepresentations she would not have transferred: UCB v Williams [2003] 1 P&CR 12 (CA).

'Presumed' and 'Actual' Undue Influence and Fraudulent Misrepresentations

350. As noted at the start of this judgment and 'chapter', this case raises the question - whether fraudulent misrepresentation can constitute 'undue influence' and if so, whether that requires a pre-existing relationship of trust and confidence. In this section of this 'chapter', I examine the first limb of that question, in the next, the second limb. On the first, one might think a conclusion of fraudulent misrepresentations inducing the Claimant to transfer the Properties would inexorably lead to a conclusion of undue influence. However, as discussed at paragraph 321 above, fraudulent misrepresentations cannot be simply 'treated' as 'actual undue influence', especially as the old distinction between that and 'presumed undue influence' was itself questioned in Etridge. Moreover, the latter requiring a relationship of trust and confidence but the former not doing so, has been questioned in the context of misrepresentations by Professor Enonchong in Chapter 8 of 'Undue Influence'. There are some relevant judicial dicta, including of Jonathan Parker LJ in UCB at [84]-[91] (quoted later) who concluded 'undue influence may include fraudulent misrepresentation'. However, in UCB, a relationship of trust and confidence was accepted, whereas here it is contested.

351. So, as Lord Nicholls put it in RBS v Etridge (No.2) [2002] 2 AC 773 (HL) at [6], 'it is necessary to go back to first principles' in living transactions (the principles are different with wills: see Rea at [20]-[32]):

"6...Undue influence is one of the grounds of relief developed by the courts of equity as a court of conscience. The objective is to ensure that the influence of one person over another is not abused. In everyday life people constantly seek to influence the decisions of others. They seek to persuade those with whom they are dealing to enter into transactions, whether great or small. The law has set limits to the means properly employable for this purpose. To this end the common law developed a principle of duress. Originally this was narrow in its scope, restricted to the more blatant forms of physical coercion, such as personal violence.

7 Here, as elsewhere in the law, equity...extended the reach of the law to other unacceptable forms of persuasion [to] investigate the manner in which the intention to enter into the transaction was secured: 'how the intention was produced', in the oft-repeated words of Lord Eldon LC, from as long ago as 1807 (Huguenin v Baseley 14 Ves 273, 300). If the intention was produced by an unacceptable means, the law will not permit the transaction to stand. The means used is regarded as an exercise of improper or 'undue' influence, and hence unacceptable, whenever the consent thus procured ought not fairly to be treated as the expression of a person's free will. It is impossible to be more precise or definitive. The circumstances in which one person acquires influence over another, and the manner in which influence may be exercised, vary too widely to permit of any more specific criterion.

8 Equity identified broadly two forms of unacceptable conduct. The first comprises overt acts of improper pressure or coercion such as unlawful threats. Today there is much overlap with...duress as [it]...has subsequently developed. The second form arises out of a relationship between two persons where one has acquired over another a measure of influence, or ascendancy, of which the ascendant person then takes unfair advantage...

9 In cases of this latter nature the influence one person has over another provides scope for misuse without any specific overt acts of persuasion. The relationship between two individuals may be such that, without more, one of them is disposed to agree a course of action proposed by the other. Typically, this occurs when one person places trust in another to look after his affairs and interests, and the latter betrays this trust by preferring his own interests. He abuses the influence he has acquired....In Allcard v Skinner (1887) 36 ChD 145...Lindley LJ, at p 181, described this class of cases as those in which it was the duty of one party to advise the other or to manage his property for him. In Zamet v Hyman [1961] 1 WLR 1442, 1444-1445 Lord Evershed MR referred to relationships where one party owed the other an obligation of candour and protection.

10 The law has long recognised the need to prevent abuse of influence in these 'relationship' cases despite the absence of evidence of overt acts of persuasive conduct. The types of relationship, such as parent and child, in which this principle falls to be applied cannot be listed exhaustively. Relationships are infinitely various. [T]he question is whether one party has reposed sufficient trust and confidence in the other, rather than whether the relationship between the parties belongs to a particular type: see Treitel, The Law of Contract, 10th ed (1999), pp 380-381. For example, the relation of banker and customer will not normally meet this criterion, but exceptionally it may: see Natwest Bank v Morgan [1985] AC 686, 707-709.

11 Even this test is not comprehensive. The principle is not confined to cases of abuse of trust and confidence. It also includes, for instance, cases where a vulnerable person has been exploited. Indeed, there is no single touchstone for determining whether the principle is applicable. Several expressions have been used in an endeavour to encapsulate the essence: trust and confidence, reliance, dependence or vulnerability on the one hand and ascendancy, domination or control on the other. None of these descriptions is perfect. None is all embracing. Each has its proper place.

12 In CIBC Mortgages pic v Pitt [1994] 1 AC 200 your Lordships' House decided that in cases of undue influence disadvantage is not a necessary ingredient of the cause of action. It is not essential that the transaction should be disadvantageous to the pressurised or influenced person, either in financial terms or in any other way. However, in the nature of things, questions of undue influence will not usually arise, and the exercise of undue influence is unlikely to occur, where the transaction is innocuous. The issue is likely to arise only when, in some respect, the transaction was disadvantageous either from the outset or as matters turned out.

13 Whether a transaction was brought about by the exercise of undue influence is a question of fact. Here, as elsewhere, the general principle is that he who asserts a wrong has been committed must prove it. The burden of proving an allegation of undue influence rests upon the person who claims to have been wronged....The evidence required to discharge the burden of proof depends on the nature of the alleged undue influence, the personality of the parties, their relationship, the extent to which the transaction cannot readily be accounted for by the ordinary motives of ordinary persons in that relationship, and all the circumstances of the case.

14 Proof that the complainant placed trust and confidence in the other party in relation to the management of the complainant's financial affairs, coupled with a transaction which calls for explanation, will normally be sufficient, failing satisfactory evidence to the contrary, to discharge the burden of proof. On proof of these two matters the stage is set for the court to infer that, in the absence of a satisfactory explanation, the transaction can only have been procured by undue influence. In other words, proof of these two facts is prima facie evidence that the defendant abused the influence he acquired in the parties' relationship. He preferred his own interests. He did not behave fairly to the other. So the evidential burden then shifts to him. It is for him to produce evidence to counter the inference which otherwise should be drawn....

15....[I]n Natwest Bank v Morgan [1985] AC 686, 707, Lord Scarman noted that a relationship of banker and customer may become one in which a banker acquires a dominating influence. If he does, and a manifestly disadvantageous transaction is proved, 'there would then be room' for a court to presume that it resulted from the exercise of undue influence.

16 Generations of equity lawyers have conventionally described this situation as one in which a presumption of undue influence arises. This use of the term 'presumption' is descriptive of a shift in the evidential onus on a question of fact. When a plaintiff succeeds by this route he does so because he has succeeded in establishing a case of undue influence. The court has drawn appropriate inferences of fact upon a balanced consideration of the whole of the evidence at the end of a trial in which the burden of proof rested upon the plaintiff. The use, in the course of the trial, of the forensic tool of a shift in the evidential burden of proof should not be permitted to obscure the overall position. These cases are the equitable counterpart of common law cases where the principle of res ipsa loquitur is invoked. There is a rebuttable evidential presumption of undue influence.

17 The availability of this forensic tool in cases founded on abuse of influence arising from the parties' relationship has led to this type of case sometimes being labelled 'presumed undue influence'. This is by way of contrast with cases involving actual pressure or the like, which are labelled 'actual undue influence': see BCCI v Aboody [1990] 1 QB 923, 953, and Royal Bank of Scotland pic v Etridge (No 2) [1998] 4 All ER 705, 711-712, paras 5-7. This usage can be a little confusing. In many cases where a plaintiff has claimed that the defendant abused the influence he acquired in a relationship of trust and confidence the plaintiff has succeeded by recourse to the rebuttable evidential presumption. But this need not be so. Such a plaintiff may succeed even where this presumption is not available to him; for instance, where the impugned transaction was not one which called for an explanation....."

352. This last point made by Lord Nicholls in Etridge is of real importance in this case, since notwithstanding his warning that the usage can be a little confusing, Counsel before me divided their submissions on undue influence into 'actual undue influence' and 'presumed undue influence'. In this case, I actually found that helpful, although it does require careful consideration. In Etridge, Lord Clyde expressed himself more strongly than Lord Nicholls on this point at [92]:

"I question the wisdom of the practice which has grown up, particularly since...Aboody ....of attempting to make classifications of cases of undue influence..[which is] not easy to define... It is something which can be more easily recognised when found than exhaustively analysed in the abstract. Correspondingly the attempt to build up classes or categories may lead to confusion. The confusion is aggravated if the names used to identify the classes do not bear their actual meaning. Thus, on the face of it, division into cases of 'actual' and 'presumed' undue influence appears illogical. It appears to confuse definition and proof. There is also room for uncertainty whether the presumption is of the existence of an influence or of its quality as being undue. I would also dispute the utility of the further sophistication of subdividing 'presumed undue influence' into further categories. All these classifications to my mind add mystery rather than illumination."

By contrast, Lord Scott in Etridge appeared rather more sympathetic to the previous classification of cases of undue influence the Court of Appeal had undertaken in Aboody, which he explained and clarified at [151], [157] and [219]:

"151....The nature of the two classes was described by Slade LJ in Aboody...at 953: "[Class (1)] is those cases in which the court will uphold a plea of undue influence only if it is satisfied that such influence has been affirmatively proved on the evidence (commonly referred to as cases of 'actual undue influence' ). . .; and [Class (2) is] those cases (commonly referred to as cases of 'presumed undue influence')...in which the relationship between the parties will lead the court to presume that undue influence has been exerted unless evidence is adduced proving the contrary, e g by showing that the complaining party has had independent advice."

157 In.... Aboody.... Slade LJ split the Class 2 cases into two subdivisions. He categorised at p 953, the 'well established categories of relationships, such as a religious superior and inferior and doctor and patient where the relationship as such will give rise to the presumption' as Class 2A cases, and confirmed that neither a husband / wife relationship nor a banker / customer relationship would normally give rise to the presumption....He continued, at p 953: 'Nevertheless, on particular facts (frequently referred to in argument as 'Class 2B' cases) relationships not falling within the 'Class 2A' category may be shown to have become such as to justify the court in applying the same presumption'.

219 The presumption of undue influence, whether in a category 2A case, or in a category 2B case, is a rebuttable evidential presumption. It is a presumption which arises if the nature of the relationship between two parties coupled with the nature of the transaction between them is such as justifies, in the absence of any other evidence, an inference that the transaction was procured by the undue influence of one party over the other. This evidential presumption shifts the onus to the dominant party and requires the dominant party, if he is to avoid a finding of undue influence, to adduce some sufficient additional evidence to rebut the presumption. In a case where there has been a full trial, however, the judge must decide on the totality of the evidence before the court whether or not the allegation of undue influence has been proved. In an appropriate case the presumption may carry the complainant home.....

But it makes no sense to find, on the one hand, that there was no undue influence but, on the other hand, that the presumption applies. If the presumption does, after all the evidence has been heard, still apply, then a finding of undue influence is justified. If.....the judge, having heard the evidence, concludes that there was no undue influence, the presumption stands rebutted. A finding of actual undue influence and a finding that there is a presumption of undue influence are not alternatives to one another."

Certainly, in Barclays Bank v O'Brien [1994] 1 AC 180 (HL) at 189-190, Lord Browne-Wilkinson had also previously endorsed the Aboody classification.

353. Even since Etridge, the subdivision of cases of undue influence evidentially as opposed to doctrinally into 'actual' and 'presumed' has persisted and even been endorsed. In Drew v Daniel [2005] EWCA Civ 507, Ward LJ said at [31]:

"In the broadest possible way, the difference between the two classes is that in the case of actual undue influence something has to be done to twist the mind of a donor whereas in cases of presumed undue influence it is more a case of what has not been done namely ensuring that independent advice is available to the donor."

Likewise, in Annulment Funding v Cowey [2010] EWCA Civ 711, Morgan J held it was open to a judge to find 'actual undue influence' when the Defence had effectively pleaded 'presumed undue influence'. Referring to paragraphs [13]-[17] of Lord Nicholls' speech in Etridge, Morgan J said in Cowey at [50]:

"What that passage establishes is that an issue as to whether there was undue influence involves an issue of fact. The party asserting that there has been undue influence can call direct evidence which supports such a finding. Alternatively, that party can call evidence of other matters which justify the inference that undue influence was used. Either way, the party is attempting to prove the fact of undue influence."

Referring to Lord Scott in Etridge at [219] in Cowey at [54], Morgan J added that:

"In the words of Lord Scott, the judge had to decide on the totality of the evidence whether undue influence had been proved..There was nothing procedurally unfair in the judge determining whether all of the evidence led him to find that actual undue influence had been established."

Moreover, as Morgan J further added in Cowey at [70], if actual undue influence is found, it is not wrong for the court to express a view on presumed undue influence in the alternative, as they were just two different ways of proving it.

354. Therefore, I accept Mr Perring's submission that after Etridge, undue influence is a 'unitary doctrine' where 'actual undue influence' and 'presumed undue influence' are not two different things, just two different methods of proving the same thing. (As Lord Nicholls said in Etridge at [16], the rebuttable evidential presumption of undue influence is the equitable counterpart of common law res ipsa loquitur - 'the thing speaks for itself'). That 'thing' - i.e. undue influence - can either be affirmatively proved without resort to any evidential presumption (i.e. a finding not a claim of 'actual undue influence'), or established without such affirmative proof by presumption from the nature of the transaction which is not rebutted (i.e. a finding not a claim of 'presumed undue influence').

355. Ultimately, as Mr Perring also submitted, relying on Lord Nicholls' observation in Etridge at [6] and Lord Lindey's in Allcard at 182-183, the objective of the law is not to save an individual from their folly, but to ensure that the influence of one person over another is not abused. But what counts as 'abusing' such influence ? Professor Enonchong in 'Duress' sets out this analysis at para. 8-001:

"Thus, for a claim to succeed on the ground of actual undue influence, it must be established that (a) the complainant's free will was impaired, (b) there was impropriety in the defendant's conduct and, in terms of causation, (c) the improper conduct constituted by (a) and (b) were part of the process by which the complainant's consent to the transaction was obtained."

Professor Enonchong at p.8-0024 equated 'impropriety' to 'unconscionability'. This is the same concept as in the cause of action of 'unconscionable bargain'. The Privy Council in Boustany v Pigott (1995) 69 P & C R 298 at 303 considered that an 'unconscionable bargain' was not just one which was hard, unreasonable or foolish, but where one party has imposed its terms in a 'morally reprehensible or culpable manner' and taken advantage of the vulnerability of the other party. Based on in part on Prof. Enonchong's analysis, Mr Perring submitted that 'actual undue influence' requires not only the impairment of the complainant's free will, but also some improper or unconscionable conduct by the defendant. (Whilst he suggested unconscionability could start after the transaction, that is not easy to square with Thompson v Foy [2010] 1 P&CR 16 at [101] quoted above). By reference to Prof. Enonchong's analysis at paras.8-20 to 8-32, Mr Perring's examples of 'unconscionability' were improper threats, bullying or importunity, domination or exploitation of vulnerability. Mr Perring contrasted situations where there is lack of knowledge of another party's vulnerability, or a genuine intention to benefit them, or simply ordinary family or commercial pressure.

356. However, if 'actual' and 'presumed' undue influence are two different ways of proving the same thing, if 'unconscionability' is a requirement, it is one for both. Moreover, any suggested test of 'unconscionability' must be seen in the light of Lord Scarman's view in Natwest Bank v Morgan [1985] AC 686 (HL) at pg.709:

"There is no precisely defined law setting limits to the equitable jurisdiction of a court to relieve against undue influence. This is the world of doctrine, not of neat and tidy rules. The courts of equity have developed a body of learning enabling relief to be granted where the law has to treat the transaction as unimpeachable unless it can be held to have been procured by undue influence. It is the unimpeachability at law of a disadvantageous transaction which is the starting-point from which the court advances to consider whether the transaction is the product merely of one's own folly or of the undue influence by another. A court in the exercise of this equitable jurisdiction is a court of conscience. Definition is a poor instrument when used to determine whether a transaction is or is not unconscionable: this is a question which depends upon the particular facts of the case."

Indeed, as Lord Briggs said in relation to constructive trusts in his 2018 lecture 'Equity in Business' (https://www.supremecourt.uk/docs/speech-181108.pdf) :

'Unconscionable conduct may be a minimum condition, but never a sufficient condition, for the intervention of Equity'.

So, I am not convinced 'unconscionability' is a test for a party's actual conduct.

357. Whilst as Lord Clyde observed in Etridge at [92], undue influence is easier to recognise than define in the abstract, it is unnecessary to fall back on any sort of 'elephant test'. In my own very respectful judgment, Lord Nicholls in Etridge at [7] put his finger on the touchstone of living transaction 'undue influence':

"The means used is regarded as an exercise of improper or 'undue' influence, and hence unacceptable, whenever the consent thus procured ought not fairly to be treated as the expression of a person's free will. It is impossible to be more precise or definitive. The circumstances in which one person acquires influence over another, and the manner in which influence may be exercised, vary too widely to permit of any more specific criterion."

Lord Nicholls' approach focusses on the effect of one party's conduct on the other's free will, rather than whether that conduct is of a particular type. If 'consent' is procured by means such that it ought not fairly to be treated as the expression of their free will, it would be 'unconscionable' - but that is the cart, not the horse. In RBS v Chandra [2011] EWCA Civ 192 at [26], Patten LJ said:

"[I]t is impossible adequately to classify every type of situation in which improper or undue influence can be said to have been used to persuade a person to enter into the transaction.... But for a person's conduct to fall into this category it must.... make it unconscionable for that person...to seek to rely on the effect of what has been done."

As I have underlined, it is the reliance on the effect of the conduct, as opposed to the specific nature of the conduct, which must be 'unconscionable'.

358. As Lord Nicholls said in Etridge at [13], in determining that question of fact, the court must take into account all of the circumstances including: the nature of the alleged undue influence, the personality of the parties (including their age, health and 'vulnerability': Etridge at [11]), their relationship, and extent to which the transaction cannot readily be accounted for by the ordinary motives of ordinary persons in that relationship. Ward LJ proposed a yardstick in Drew at [36]:

"[I]n all cases of undue influence the critical question is whether or not the persuasion or the advice, in other words the influence, has invaded the free volition of the donor to accept or reject the persuasion or advice or withstand the influence. The donor may be led but she must not be driven and her will must be the offspring of her own volition, not a record of someone else's. There is no undue influence unless the donor if she were free and informed could say 'This is not my wish, but I must do it'."

359. It is true that some of the phrases Ward LJ used in Drew were drawn from cases on undue influence in the context of wills, which is narrower than for living transactions: limited to 'coercion' (see Rea [20]-[32]). Certainly, if a party to a living transaction were 'coerced' into it, that would also plainly be 'undue influence'. Such 'coercion' would include the cases Lord Nicholls described in Etridge at [8] of 'overt acts of improper pressure or coercion such as unlawful threats'. A clear example of that is a wife being bullied by a husband into agreeing loans until she eventually signed anything put in front of her as in Aboody. In that context, as Lord Nicholls said in Etridge at [8] there is considerable overlap with modern common law duress (which was also Lord Hodge's view in the duress case of Pakistan Airways v Times Travel [2021] 3 WLR 727 (SC)).

360. Indeed, modern Family Law has belatedly caught up with Equity in recognising 'coercion and control' as the touchstone of 'domestic abuse', as the husband's conduct in Aboody would now doubtless be seen. I respectfully agree with Prof. Enonchong at paras.8-006-7 and 8-014-8-18 that such cases do not require a pre-existing relationship at least of trust and confidence: it would be a contradiction in terms and indeed an abuse of language for the law to do so. As Lewison J said in Thompson at [101]: 'people do not usually trust those who coerce them'. However, it is fair to characterise such cases as a 'relationship of influence' - but not of 'trust and confidence', rather of 'ascendancy', 'control' or 'domination', as Lord Nicholls put it in Etridge at [11]. I come back to that point below.

361. However, 'undue influence' is not limited to such 'barn-door undue influence'. Equity is more subtle than that. As Ward LJ also observed in Drew at [30]:

"It is true that Lord Nicholls defined actual undue influence in terms of 'overt acts of improper pressure or coercion such as unlawful threats'. It is, of course only one way of describing [it]...Lindley L.J. in Allcard [at 181 described it as] '...cases in which there has been some unfair and improper conduct, coercion from outside, over−reaching, some form of cheating, and generally, though not always, some personal advantage obtained by a donee placed in some close and confidential relation to the donor'."

As Briggs J (as he was) said in Hewitt v First Plus [2010] 2 P&CR 22 (CA) [25]:

"[A] finding of undue influence does not depend, as a necessary pre-requisite, upon a conclusion that the victim made no decision of her own, or that her will and intention was completely overborne. No doubt there are many examples where that is shown, but a conscious exercise of will may nonetheless be vitiated by undue influence."

As Lord Nicholls himself noted in Etridge at [12], whilst undue influence is only likely to arise 'when, in some respect, the transaction was disadvantageous to the complainant from the outset or as matters turned out', in Pitt the Lords over-ruled the requirement stated in Aboody of 'manifest disadvantage' in Morgan for 'actual undue influence'. Lord Browne-Wilkinson said in Pitt at pgs.20/29:

"......[I]n my judgment there is no logic in imposing such a requirement where actual undue influence has been exercised and proved. Actual undue influence is a species of fraud... Like any other victim of fraud, a person who has been induced by undue influence to carry out a transaction which he did not freely and knowingly enter into is entitled to have that transaction set aside as of right. A man guilty of fraud is no more entitled to argue that the transaction was beneficial to the person defrauded than is a man who has procured a transaction by misrepresentation. The effect of the wrongdoer's conduct is to prevent the wronged party from bringing a free will and properly informed mind to bear on the proposed transaction which accordingly must be set aside in equity as a matter of justice."

362. This brings me to the first part of the second question I asked at start of this judgment, which in the light of Etridge and the cases since already discussed, I re-phrase as: 'Does proof that fraudulent misrepresentation induced a transaction affirmatively prove undue influence ? The answer to that first part of the question is that it plainly can. Indeed, in Etridge, Lord Hobhouse observed firmly at [103]:

"Actual undue influence...is an equitable wrong committed by the dominant party against the other which makes it unconscionable for the[m] to enforce his legal rights against the other. It is typically some express conduct overbearing the other party's will. It is capable of including conduct...at law, for example, duress and misrepresentation. Indeed, many of the cases relating to wives...guarantee[ing] and charg[ing] a husband's debts involve allegations of misrepresentation (e.g. O'Brien). Actual undue influence does not depend upon some pre-existing relationship between the two parties though it is most commonly associated with and derives from such a relationship. He who alleges actual undue influence must prove it."

On that point, Lord Nicholls drew this dividing line in Etridge at [32]-[33]:

"Undue influence has a connotation of impropriety. In the eye of the law, undue influence means that influence has been misused. Statements or conduct by a husband which do not pass beyond the bounds of what may be expected of a reasonable husband in the circumstances should not, without more, be castigated as undue influence. Similarly, when a husband is forecasting the future of his business, and expressing his hopes or fears, a degree of hyperbole may be only natural. Courts should not too readily treat such exaggerations as misstatements.....Inaccurate explanations of a proposed transaction are a different matter....."

363. Lord Nicholls' dividing line was explored further in Chandra, where a husband's genuine forecast of costs in persuading a wife to guarantee a business loan was held not misrepresentation even though it turned out to be wrong. Patten LJ at [94] endorsed David Richards J's (as he then was) differentiation at first instance between 'deliberate concealment' which can amount to 'unacceptable means' and 'inadvertent non-disclosure' which could not. Whilst Patten LJ in Chandra at [32] differentiated between misrepresentation and undue influence, he was expressing the view that innocent misrepresentation could not produce 'undue influence'. However, Patten LJ in Chandra did not say fraudulent misrepresentation could not do so - on the contrary, at [26], he gave 'conscious deception' as an example of undue influence. In any event, that position is put beyond doubt by two other Court of Appeal decisions which it is not clear were cited to the Court in Chandra:

363.1 In Cowey, a man had mistakenly misled his partner about the fundamental nature of the loan he was securing on their house, which the Court held the judge was entitled to find to be 'actual undue influence' and the Court of Appeal agreed. Giving the only judgment, Morgan J said at [62] and [64]:

"The judge did not refer to misrepresentation as distinct from other forms of undue influence. In Etridge, some of the members of the House of Lords discussed undue influence and misrepresentation interchangeably, on the basis that undue influence can take different forms and misrepresentation is one of those forms."

363.2 Moreover, as noted above at paragraph 350, in UCB, Jonathan Parker LJ held where a husband had fraudulently misrepresented the status of a new charge on their home to his wife, there was undue influence:

"[U]ndue influence may include fraudulent misrepresentation.... Both constitute improper and unacceptable methods of persuasion [a]s Lord Nicholls says in paras 32 and 33 in Etridge..." (at [87]).

364. As Prof Enonchong says at para.8-103 of his work, discussing Cowey and Chandra, innocent misrepresentation or non-disclosure is more difficult to analyse as proving 'undue influence'. However, fraudulent misrepresentation plainly can amount to undue influence, but that is not the same as saying it automatically will. For example, in Zurich v Hayward [2017] AC 142 (SC), where defendant insurers in a personal injury case settled a claim which they suspected to be exaggerated and it turned out it had been fraudulently so, it was held they could rescind the settlement agreement for fraudulent misrepresentation - there was no suggestion they could have done so for undue influence. Indeed, it follows from what I have said the real issue is not whether fraudulent misrepresentation can amount to undue influence, but whether if there has been fraudulent misrepresentation, in the words of Lord Nicholls in Etridge at [7], 'ought the consent thus procured not fairly to be treated as the expression of a person's free will ?' In Etridge at [36] Lord Nicholls said a husband misleading a wife could be undue influence, but did not suggest that was different from his test at [7]. In short, the ultimate issue remains whether there was undue influence not (just) deceit. But that therefore leads to the second part of the second question I phrased at the start of the judgment I clarify this way: whilst fraudulent misrepresentation clearly can amount to 'unacceptable means' for the purposes of undue influence, does it also require there was a pre-existing relationship of trust and confidence ?

A Relationship of Trust and Confidence ?

365. For cases of what used to be called 'presumed undue influence', as Lord Nicholls said in Etridge at [18]-[19], unless there is a special class of relationship such as a parent over child (the old Aboody 'Class 2A'), in other relationships (the old 'Class 2B'), as Lord Nicholls said in Etridge at [10] 'the question is whether one party has reposed sufficient trust and confidence in the other, rather than whether the relationship belongs to a particular type'. Lewison J said in Thompson at [100]

"First, although in Etridge Lord Nicholls described the paradigm case of a relationship where influence is presumed as being one in which the complainant reposed trust and confidence in the other party in relation to the management of the complainant's financial affairs ([14]), I do not consider that this description was intended to be exhaustive. To restrict the type of trust and confidence in this way would not be consistent with the authoritative exposition by Lindley L.J. in Allcard ....in which he referred to 'cases in which the position of the donor to the donee has been such that it has been the duty of the donee to advise the donor, or even to manage his property for him'. This very sentence was paraphrased by Lord Nicholls at [9]. In addition, when describing the circumstances in which the burden of proof would shift at [21]...[he] used much more general language. Secondly, the requisite trust and confidence can arise in the course of the impugned transaction itself: Turkey v Awadh [2005] 2 P. & C.R. 29 ([11])."

Buxton LJ said in Turkey at [9]-[11] whilst a relationship of trust and confidence usually pre-dates a transaction, it can arise 'because of its actual circumstances' as there where a father bought his Saudi daughter's English property which he arranged. Buxton LJ also noted in Macklin v Dowsett [2004] EWCA Civ 904 one arose where an owner sold his land to occupy it as life tenant to build a bungalow but if it was not completed in three years, he agreed to surrender it for only £5,000.

366. However, Thompson itself was the other side of the line. A daughter promised to buy out her mother's property and the mother gifted it, but the daughter did not pay. Lewison J held their relationship was one of trust, but no different from the mother's with her other daughter. The mother did not entrust financial affairs to the key daughter, made her own decisions and knew she took a risk with the gift, not least as she had first been warned about that by an independent solicitor.

367. Before Etridge, in Goldsworthy v Brickell [1987] Ch 378 at 401, Nourse LJ said:

"In all of these relationships, whether of [Class 2A or Class 2B], the principle is the same. It is that the degree of trust and confidence is such that the party in whom it is reposed, either because he is or has become an adviser of the other or because he has been entrusted with the management of his affairs or everyday needs or for some other reason, is in a position to influence him into effecting the transaction of which complaint is later made....[In] cases where functions of this sort constitute the substratum of the relationship, there is no need for any identity of subject matter between the advice which is given or the affairs which are managed on the one hand and the transaction of which complaint is made on the other. Nor....is it necessary for the party in whom the trust and confidence is reposed to dominate the other...in any sense in which that... is generally understood."

Nourse LJ's analysis in Goldsworthy was recently re-affirmed by Sir Nicholas Patten giving judgment for the Privy Council in Enal v Singh [2023] 2 P&CR 5 at [55]. In holding that a grandson's power of attorney over his grandfather's property gave rise to a relationship of trust and confidence, he said at [59]:

"The power of a court of equity to intervene in these cases is designed to prevent a relationship of influence from being abused. The object of its inquiry is to determine how the intention to enter into the transaction was produced. In Etridge Lord Nicholls at [7] observed 'the circumstances in which one person acquires influence over another, and the manner in which that influence may be exercised, vary too widely to permit of any more specific criterion'. The earlier authorities are full of examples of cases where even in the absence of some overt form of improper pressure or coercion gifts or transfers of property have been set aside....[In] Allcard where an over generous gift of property to a religious order was held to be the product of motives of beneficence created by the relationship between Miss Allcard and the order which she had joined... raising an inference that it was induced by th[at] relationship of dependence that had grown up...."

368. In Enal at [50] Sir Nicholas Patten noted the overlap between relationships of trust and confidence and fiduciary duties, also discussed in Snell's Equity (2022) 34^th Ed at paras.7-065-9. It also explains at paras.7-003-6 that outside settled categories of fiduciary such as trustee (including resulting trustee as I return to), fiduciary duties can also arise in 'relationships of trust and confidence'. That phrase in the fiduciary context was equated with the 'duty of loyalty' Henry J for the Privy Council described in Arklow v Maclean [2000] 1 WLR 594 (PC) at 598-600: 'where one person is in a relationship with another which gives rise to a legitimate expectation that Equity will recognise...the fiduciary will not utilise his or her position in such a way which is adverse to the interests of the principal'.

369. Having said all that, as Prof. Enonchong explained at para.10-044 of his work:

"As Lord Nicholls made clear in Etridge [at 11] a relationship of influence is not confined to cases where one party reposes trust and confidence in another. It extends to other cases where one party has ascendancy, domination or control over the other party due to reliance, dependence or vulnerability of the other party. Therefore, in determining whether there was a relationship of influence, it would be wrong for the court to confine itself to the question whether there was evidence of trust and confidence in financial matters thereby ignoring evidence of the complainant's vulnerability. However, it is not enough simply to show that one party was under some disability such as chronic intoxication. What is required is affirmative proof one party had influence over the other in the relationship."

370. That leads me to cases of 'actual undue influence' - in other words, 'affirmative proof' of undue influence. Classically, as Lord Hobhouse said in Etridge at [103], that 'does not depend upon some pre-existing relationship between the two parties though it is most commonly associated with and derives from such a relationship'. That is because the classic territory of 'actual undue influence' entails conduct like improper pressure or coercion, such as unlawful threats' or indeed 'domination' which as discussed above at paragraph 360, do not require a pre-existing relationship of trust and confidence. However, one analysis of the 'coercion' cases (i.e. indisputably 'Class 1 cases' of 'actual undue influence') is that whilst there is no need for a relationship of trust and confidence, the 'coercion' itself creates a 'relationship of influence', albeit of a twisted kind. After all, even with so-called 'presumed undue influence' cases, a 'relationship' can arise due to the circumstances of the transaction itself' as Buxton LJ put it in Turkey at [11] if in a very different context. However, this is not a 'coercion' case.

371. As Lord Nicholls observed in Etridge at [9], older cases to which the label 'presumed undue influence' could apply have articulated the nature of the required 'relationship' in different ways, such as one party 'owing a duty to advise the other or manage his property' in Allcard; or 'relationships where one party owed the other an obligation of candour and protection' in Zamet. Against that context, Lord Nicholls himself in Etridge at [33] gave the example where a husband whose wife has reposed trust and confidence in him prefers his own interests to hers, describing him as 'failing to discharge the obligation of candour and fairness he owes her looking to him to make the major financial decisions'. Building on this, Prof. Enonchong at paras. 8-009-13 of his work argues that deliberate misrepresentation or concealment cannot be actual undue influence without a pre-existing 'duty of candour and fairness' he summarised at para.8-10:

"For actual undue influence to be established on the basis of a breach of the duty of candour and fairness it is necessary to show that there existed between the parties a particular kind of relationship prior to the impugned transaction.....Lord Nicholls...[referred] to cases where the complainant reposed trust and confidence in the other party in management of [their] financial affairs. It therefore appears that for a relationship to be regarded as a protected relationship in this context one party must at least have reposed trust and confidence on the other in the management of the affairs of the former. This will depend on the facts of each case." (my underline)

372. One reading of this analysis is effectively to equate 'the duty of candour and fairness' with 'a relationship of trust and confidence'. Certainly, that appears to have been the approach of Briggs J (as he then was) in Hewitt where, having considered Chandra and Thompson, he held a husband's deliberate non-disclosure of his affair to his wife when asking her to agree to a new bank charge meant her consent had been procured by undue influence. He said at [29]-[30]:

"The first question is whether Mrs Hewett reposed a sufficient degree of trust and confidence in her husband to give rise to what Lord Nicholls described as an obligation of candour and fairness owed to her. I consider that she did, for two reasons. The first is that...she regarded Mr Hewett as being in charge of the family finances, albeit not to an extent that excluded her from any participation in important decisions.... It would....be wrong to confine a husband's obligation of candour and fairness when proposing a risky financial transaction to his wife as confined to cases where the wife meekly follows her husband's directions without question. The purpose of an obligation of candour is that the wife should be able to make an informed decision (with or without the benefit of independent advice) properly and fairly appraised of the relevant circumstances. The second reason is that the specific transaction which Mr Hewett put to his wife required her to take on trust his promise to make the instalment payments due to First Plus arising from the re-mortgage. As the Judge put it....that is what Mr Hewett swore to do on their children's lives. There was therefore both a pre-existing relationship of trust and confidence, and an intensification of it derived from the very basis of the proposed transaction." (my underline)

373. As with most 'labels', in my own very respectful judgement, it is important to distinguish between the label and the contents. The 'label' of a 'duty of candour and fairness' taken from Lord Nicholls' specific example in Etridge at [33] of a husband who 'fails to discharge the obligation of candour and fairness he owes to his wife looking to him to make the major financial decisions' must be seen in the light of his description of the wife as first 'reposing trust and confidence in him'. Likewise, Lord Nicholls appears to have derived that expression 'obligation of candour and fairness' from Lord Evershed MR's description in Zamet of 'an obligation of candour and protection', which Lord Nicholls quoted in Etridge at [9]. Yet as he immediately went on to say at [10]-[11], the modern formulation of that is the 'relationship of trust and confidence', although a relationship of influence or ascendancy can arise where a vulnerable person has been exploited. Therefore, given that Lord Nicholls and other Lords in Etridge like Lord Clyde discouraged a proliferation of confusing terminology and classification in the law of undue influence, I prefer to focus on the contents of a 'relationship of trust and confidence' rather than the label of 'an obligation of candour and fairness'.

374. After all, Lord Nicholls, Lord Scott and the other Lords in Etridge stressed that 'actual' and 'presumed' undue influence were different methods of proving the same underlying concept - or 'unitary doctrine' - as Mr Perring put it. Therefore, at least in cases which do not involve 'direct pressure' or 'domination' where a relationship of 'trust and confidence' (at least) is inapt, it is logical to require the claimant to prove the same relationship, whether they then seek to prove undue influence affirmatively by 'unacceptable means' like deliberate misrepresentation or concealment; or by invoking the 'evidential presumption' discussed in Etridge.

375. Therefore, I accept that for both what Mr Halkerston called the Claimant's 'actual undue influence' and 'presumed undue influence' arguments, I agree with Mr Perring that the burden is on her first to prove she had a 'sufficient relationship of trust and confidence' with the Krishans. But since on 'presumed undue influence' I am leaving aside my findings on fraudulent misrepresentation, I will leave them aside on 'trust and confidence' as well, even as applied to 'actual undue influence' (though they come back in at a later stage). Notably it is relevant to both that even on his very different factual findings, HHJ Purle QC said at [32]:

376. In his submissions applying the law Mr Perring set out to the facts, Mr Graham made seven different points, which I can conveniently group into three themes:

376.1 Firstly, I agree with Mr Graham the relationship between the Krishans was not one of 'domination' not requiring a relationship of trust and confidence itself proving the requisite 'influence'. Such a finding would be inconsistent with my finding that it took the Krishans four months from July to November 2005 to agree to their plan. I agree with Mr Graham that the Claimant's relationship with the Krishans was not a 'special class of relationship' to use Lord Nicholls' expression in Etridge at [18] (called in Aboody, O'Brien and Pitt a 'Class 2A relationship'), in which the law irrebuttably presumes influence, including parent over child (but not child over parent - Enal at [51]), guardian over ward, trustee over beneficiary, solicitor over client and medical adviser over patient, but not as between husband and wife, as Lord Nicholls clarified in Etridge at [19]. The Claimant's relationship with Mrs Krishan was that of cousins, whether or not 'like sisters', as I discuss below. However, I disagree that the Claimant and Dr Krishan had no relationship beyond the husband of her cousin. As I shall explain, from July 2005 to April 2006, he was akin to the Claimant's informal agent with Coventry CC in respect of the Properties, which I will find was effectively a fiduciary one, but I agree here not a 'Class 2A' one in any event. In any event, that is not the Claimant's case. She simply argues that she developed with both the Krishans what used to be called a 'Class 2B' 'relationships of mutual trust and confidence'. That is what I analyse.

376.2 Secondly, I also agree with Mr Graham in principle that 'mutual trust' or 'inequality of bargaining power' are not enough by themselves to prove a 'Class 2B' 'relationship of trust and confidence' in the sense explained by Lord Nicholls in Etridge at [10]-[11]. This is illustrated by Thompson at [103], where the mother's relationship with the daughter in dispute was no different to her relationship with another daughter. However, Mr Graham's submissions that this was all the Claimant's relationship with the Krishans was, that they had no relationship of influence over her and/or were not in a position to influence her into the transaction, beg questions I must answer.

376.3 Thirdly, the real focus of Mr Graham's submission here is that the Claimant and Krishans' relationship was not one of 'trust and confidence' in the sense of 'management of her financial affairs'. I must consider this at more length.

377. I agree with Mr Graham that the relationship between the Claimant and the Krishans was not one in which she placed her trust and confidence in them in respect of management of her financial affairs generally and that other than for the Properties, she remained entirely free and able to make her own decisions. Therefore, the case is different from Enal where a grandfather had decades earlier been granted an effectively unused power of attorney by his son over the latter's properties which the grandfather had bought in his son's name. The grandfather used the power of attorney to sell one of the properties for a tenth of its real value without consulting his son, to his daughter (the son's estranged sister) with whom he lived and his grandson (her son), to whom the grandfather had recently granted his own power of attorney. Sir Nicholas Patten for the Privy Council said at [57]:

"The existence of the [grandson's] power of attorney is not of itself sufficient to raise a presumption of undue influence but it is probative of a relationship of trust and confidence which coupled with the highly unusual aspects of the sale ....lay[s] the ground for an inference of undue influence."

378. However, as I noted, in Enal at [55], Sir Nicholas Patten had endorsed the analysis in Goldsworthy quoted above of Nourse LJ I partially repeat and underline:

"[T]he degree of trust and confidence is such that the party in whom it is reposed, either because he is or has become an adviser of the other or because he has been entrusted with the management of his affairs or everyday needs or for some other reason, is in a position to influence him into effecting the transaction of which complaint is later made....

Therefore, relationships of trust and confidence are not limited to those entailing 'the management of financial affairs generally' and also include 'advisers'. After all, Lord Nicholls in Etridge at [18] described a solicitor and client as a 'Class 2A relationship' where influence is irrebuttably presumed, yet except in the unusual case of a Court of Protection Deputy, is a solicitor is very rarely entrusted with general management of their client's financial affairs. Moreover, Nourse LJ in Goldsworthy also spoke of 'management of everyday needs or for some other reason' and added there was no need for identity between such a relationship and the impugned transaction. That is inconsistent with a requirement of management of financial affairs generally. Furthermore, whilst Lord Nicholls in Etridge at [14] spoke of a complainant 'placing trust and confidence in the other party in relation to the management of the complainant's financial affairs', as Lewison J said in Thompson at [100] 'that description was not intended to be exhaustive' and to restrict it in that way would be inconsistent with Allcard, which Lord Nicholls paraphrased in Etrdige at [9]; and the broader way Lord Nicholls himself put it at [21] (quoted later). Ultimately, as Nourse LJ said in Goldsworthy, what matters is the 'degree of trust and confidence' in the relationship was such that one party was in 'a position to influence' the other into the impugned transaction.

379. In my judgment, the relationship between the Claimant on one hand and each of the Krishans on the other, had a degree of trust and confidence, such that the Krishans individually and jointly were in a position to influence the Claimant into the transaction of transferring the Properties to Gracefield on the '15^th March letter terms', let alone the 'PSA Plus' terms. As I said at paragraph 191 above but repeat for ease with further elaboration, one can see the Claimant's trust in the Krishans growing and developing over time:

379.1 Firstly, the origin of the Claimant's trust in the Krishans lay in her historical relationship with her cousin Parkash, to whom she had been like a 'big sister'. They had been out of contact for over 30 years due to her stifling marriage to Bill and his conservative family. However, I accept it was the Claimant's strong emotion (always crucial to her) that her beloved Parkash had come back into her life just when she needed her in 2004. So, the Claimant took her into her confidence with her problems to an extent she did not even do with Bobby. That was the foundation for what followed.

379.2 Secondly, once Mrs Krishan had found out about the Properties in early 2005 and shared that with her husband, she tried to persuade the Claimant to let them manage them. However, the Claimant was still content for Bobby to do so. But after the 30^th June meeting, she told Mrs Krishan about CPOs as a last resort; and the idea of a health centre. The Krishans wanted to be involved and Mrs Krishan used the re-established trust and confidence in herself from the Claimant (who was feeling guilty about 'burdening Bobby') to persuade her to trust Dr Krishan to be her representative for the Properties instead. That was an intensely personal relationship and built upon their family ties - apt for what the Claimant saw as 'family properties' - and her established trust in Mrs Krishan. By extension from her cousin, she also trusted her husband. Whilst Dr Krishan did not become the Claimant's 'power of attorney' in the formal sense in Enal on 4^th July 2005, the use of that phrase by the Council in their note of 30^th June 2005 is telling. I find Dr Krishan essentially became the Claimant's agent with the Council for negotiations about the Properties and indeed the communication channel between it and the Claimant, giving him the means and opportunity to abuse his role. In my judgment, at least in Dr Krishan's case, I would find he then took on the fiduciary duty of loyalty under the principles stated in paragraph 368 above, including Arklow, especially once he told the Claimant not to contact the Council, as it would be seen as influencing the CPO process (as her solicitors' letter of 24^th October 2008 states), which I find was probably before not after the transfers. However, as I heard no submissions on that, I stress my conclusion on the relationship of trust and confidence would be the same without that conclusion (but I will return to it on remedies). In any event, due to the strength of the Claimant's trust and confidence in Mrs Krishan born of their past and rediscovered present, the Claimant trusted her husband Dr Krishan to take over from her own son. This intertwining of family relationships and informal agency is redolent of Turkey, where the father arranged the sale to himself of the English house he lived in (with no valuation) from his financially-struggling Saudi daughter and husband.

379.3 Thirdly, once the Claimant had been persuaded to trust Dr Krishan with dealing with the Council about the Properties, I will find below that Dr Krishan, but also Mrs Krishan, deliberately developed the Claimant's trust in them by what I am calling their 'rescue narrative'. This was partly what I am calling the 'stick' of dire warnings about the CPOs - indeed that they had been made; and partly what I am calling the 'carrot' of financial support becoming financial dependency of the Claimant on them; with reassurance they would help - as 'payback' for her previous help for Mrs Krishan. Such was the Claimant's trust in them - first her beloved cousin Mrs Krishan, now her husband Dr Krishan, she agreed to this. I turn now to elaborate this.

380. Since I have now travelled this ground frequently, I simply give the key points:

380.1 From July to November 2005, even ignoring for now my findings about the fraudulent misrepresentations by the Krishans to the Claimant, their relationship of trust and confidence expanded further into financial support. This cemented the strength of that relationship because the Claimant had been in financial difficulties for a long time, especially from 2004-05. Indeed, the Claimant's impecuniosity, if not 'serious disadvantage' for the purposes of 'unconscionable bargain', did make her relatively vulnerable and financially dependent on the Krishans. This is analogous to Macklin, where at [28], Auld LJ said whilst inequality of bargaining power was in itself insufficient for a relationship of trust and confidence, it was relevant. However, again family was entwined too because the Claimant only agreed to proceed with the Krishans' plan when they had gained not only Bobby's but Bill's trust and confidence too with his symbolic handing over of keys.

380.2 By SB's meetings in January-February 2006, the Claimant's trust and confidence in both Krishans in respect of the Properties and their development was now so strong that she effectively handed over control and decision-making to them, was simply a 'passenger' at meetings, where she showed her gratitude to them to SB. Whilst well short of 'domination', the relationship between the Claimant and the Krishans was of implicit trust, informal advice, property management and financial dependency, like the old farmer with his tenant and business partner in Goldsworthy.

380.3 Finally, from February to April 2006, again leaving aside my findings of fraudulent misrepresentation, the Krishans again drew on their relationship of trust and confidence with the Claimant - e.g. on 24^th March when she questioned SB's 15^th March letters, Mrs Krishan did so (even if she did not do so fraudulently). Moreover, in this period, the Claimant not only signed letters Mrs Krishan drafted for her to sign, but also the transfers, at a clear undervalue of £100,000 from the market value she was told, with both that and the further £200,000 only to be paid on future sale (even if there were an additional 50% profit share). On 3^rd April, Mrs Krishan even drafted a letter for the Claimant to instruct Mr Whiston to draft a will naming the Krishans as executors. Of course, this case is not quite as clear as Enal with its chain of powers of attorney and an elderly man living with his daughter whose son had his power of attorney. But nor is it like Thompson, where the mother knowingly took a risk. I find there was 'trust and confidence'.

381. This is confirmed when one stands back and distinguishes the different roles the Krishans played in their individual relationships with the Claimant:

381.1 Mrs Krishan was the foundation of the relationships: the Claimant's beloved cousin - as Mrs Krishan admitted in 2010 even if she rowed back from it before me - they were 'cousin-sisters' - more like a sister than a cousin. The Claimant rediscovered her 'cousin-sister' in 2004 at a low ebb and Mrs Krishan (in fairness, genuinely) supported her emotionally. However, once she knew about the Properties in 2005, she then worked to extend that relationship of 'emotional trust and confidence' with the Claimant to encompass her 'family properties' and succeeded in July 2005 to widen it not only to the Properties, but also to her husband as well.

381.2 Once the Claimant became worried about the Properties in July 2005, for her Dr Krishan was the ideal man for the job, even better than her son Bobby. Not only was he married to her beloved 'cousin-sister', he had just the experience to fight the CPOs that concerned her. From the Claimant's perspective at the time (and leaving aside what she now knows about his fraudulent misrepresentations), Dr Krishan took charge, managed the situation with the Council, took on the bills for the Properties and arranged all the professionals required the Claimant had no interest in. So, whether or not a fiduciary, Dr Krishan plainly enjoyed her trust and confidence.

381.3 However, tellingly, when the Claimant saw SB's letters in March 2006, it was Mrs Krishan again, drawing on their history, steering her by the elbow (even if not fraudulently) into signing the Properties over to Gracefield. Only years later did the Claimant realised what had really happened, which may well be one reason why she was so angry in her evidence.

382. In my judgment, this was undoubtedly a relationship of sufficient trust and confidence. It had grown. It had kept the Claimant on an even financial keel. It had led to her effectively handing over all control to the Krishans from November 2005, which enabled them to steer the Claimant through the transfer process in March/April 2006. By the same repeated (even if not fraudulent) encouragement, entangling and gradually binding her into greater and greater trust and confidence in the Krishans, until she dutifully signed anything in front of her, including her family properties away for very modest financial support 'up front'. When all is seen holistically, it shows the huge trust the Claimant put in the Krishans.

383. Indeed, even if I am wrong (and more importantly, so would be Lewison J in Thompson) and 'trust and confidence' requires management of financial affairs generally, on my findings, for the same reasons, this was even more clearly a 'relationship of influence' based on the Claimant's relative vulnerability and the Krishans' increasing ascendancy (which I have found they deliberately brought about). Indeed, contrary to HHJ Purle QC's findings, I find the Claimant absolutely did put her decision-making powers for the Properties at the disposal of the Krishans. For example, when the Claimant queried SB's letters in March, she then meekly accepted Mrs Krishan's explanation (even if not fraudulent) and dutifully signed the letter (which the Krishans much later used for their forgery).

384. But let me assume I am wrong on the facts and agreed with the Purle Judgment. Let us say, as HHJ Purle QC did at [6], [11] and [12] of it, the Claimant was stressed and in financial difficulty and Bobby's negotiations had failed, so she who persuaded the Krishans to help her, rather than the other way around as I have found. Let us also say, as found by HHJ Purle QC at [14]-[16], that she was happy to transfer the Properties to Gracefield and knew full well the plan was to sell them. Further, let us say, as HHJ Purle QC found at [19]-[23], that the oral agreement was in the terms he declared. Then finally, as HHJ Purle QC found at [19]-[24], that the Claimant was entirely happy to transfer the Properties and had the chance of independent advice from Mr Whiston before she did. Yet despite all that, HHJ Purle QC still found at [32] of the Purle Judgment: 'there was undoubtedly a relationship of trust and confidence'. I entirely agree. However, of course my own findings of fact are very different. It is with my own findings in mind that I must now turn to my conclusions on 'actual undue influence'.

The 'Actual Undue Influence' Argument

385. Whilst as I have explained, 'actual undue influence' is simply a different method of proof than 'presumed undue influence', it is convenient to label the Claimant's argument of 'affirmative proof' as her 'actual undue influence argument'. As I summarised above at paragraph 364, whilst fraudulent misrepresentation can produce undue influence, the ultimate test for what is really 'affirmative proof' of it was set out by Lord Nicholls in Etridge at [7]: whether a complainant's 'intention to enter into the transaction' was 'produced by unacceptable means' so that the transaction 'ought not fairly be treated as the expression of their free will'.

386. The short answer is that, for the reasons given at paragraphs 171-230 and 321-349 above, I am satisfied undue influence is affirmatively proved on the balance of probabilities. The Krishans from July 2005 to April 2006, by means of the fraudulent misrepresentations I found proved, unconscionably produced the Claimant's intention to transfer the Properties to Gracefield by unacceptable means so they ought not fairly to be treated as the expression of her free will. Contrary to HHJ Purle QC's finding quoted at paragraph 375 above, I find on the balance of probabilities the Claimant did 'put her decision-making powers at the disposal of the Krishans'; and they did abuse her trust and confidence:

386.1 I have found that from July to November 2005, the Krishans used their relationship of trust and confidence and fraudulent misrepresentations to wear down the Claimant's resistance to transferring the Properties to a company they could control. They deliberately misrepresented there were CPOs (or if I am wrong, that they were 'likely') and exaggerated the consequences - that they would leave her 'penniless' and 'homeless'. But they also 'reassured' her if she transferred the Properties they would fight the CPOs. In short, they invented a Bogeyman, then said they would fight it. They built on this by saying the Properties were only worth £100,000, so were worthless to her given her debts and underplayed the true market value of the Properties as £300,000, when they correctly suspected it was higher, so deliberately did not get valuations. The last was their reassurance to the Claimant if she transferred the Properties, they intended to manage them for her benefit, when their true intention was to manage them for their own.

386.2 Having secured the Claimant's agreement in principle in November 2005, from then until April 2006, the Krishans carried her like a passenger through meetings and letters they produced for her to sign as they drove her towards the transfers. They dealt with any impediments to their plans to transfer them to Gracefield with further fraudulent misrepresentations, such as to SB and the Claimant about the '£100,000 CPO Value' and indeed, Mrs Krishans' lies on 24^th March when the Claimant queried SBs' letters, then her shepherding of the Claimant through the transfers soon afterwards.

In my judgement, it does not really matter how the 'terms of the transaction' are analysed. On the 'PSA Plus terms', whilst the Claimant was promised a payment of £300,000 and then 50% of the profit of sale of the Properties, the Krishans misled her about both aspects. On the '15^th March letter terms', she did not even get a contractual 'profit share' illustrating the force of the undue influence exerted on her by the Krishans. Indeed, she signed 'transfer terms' loaning Gracefield the £100,000 'price' it was supposedly paying her for her own Properties.

387. However, in deference to the high quality of Mr Graham and Mr Perrings' submissions, let me answer them. Mr Graham's over-arching submission was that there was no nor unconscionable conduct by the Krishans, or even if there was, no impairment of the Claimant's will in her agreement to transfer. As he put it: the Claimant was not led to do anything, never mind driven: it was not in her nature to be led; and it was not in the Krishans' nature to drive her'. I will address Mr Graham's individual points in three broad groupings of them to start with:

387.1 Some of Mr Graham's points are not disputed, like the absence of threats, or coercion. Some I have already rejected for reasons I need not repeat, like there being no relationship of trust and confidence and so no duty of candour and fairness (another label for it) and no misrepresentations.

387.2 Some of Mr Graham's points cannot stand with my findings of fact and indeed those conclusions on the fraudulent misrepresentations, such as the Claimant being an equal partner in a straightforward commercial venture and being fully involved in the process and in all decision-making by the Krishans. I have borne those submissions well in mind, but have rejected them for the reasons I have summarised above.

387.3 But the main thrust of Mr Graham's submissions were on the Claimant's independent - indeed dominant - will. I will consider this point in more detail under three sub-headings: independence, involvement and advice.

388. In relation to independence, Mr Graham submitted positively and correctly that the Claimant was an intelligent, independent and resourceful woman. She is a graduate and trainee teacher, owning her own property and caring for her family. In 2002-2004, the Claimant had handled the Properties alongside Bobby, getting a survey of the Cinema and a valuation and even in July 2005, she received the Donaldsons' valuations. I accept all that. Indeed, since it is rare for an advocate to 'endure' cross-examination more than the witness, Mr Graham has earned the right to point to the Claimant's histrionic evidence to say she was 'strong and robust, not a woman who could be cowed from exercising her free will'. Quite.

389. However, when determining whether the Claimant was subject to actual undue influence in 2005-06, I have to look at evidence of the Claimant's independence at that time, not years before and certainly not years later in the shadow of the litigation which has consumed her life. As I have found at paragraphs 150-165, the contemporaneous evidence shows that in 2004-05 the Claimant's ordinarily redoubtable independence and intelligence was rather overwhelmed and she was under 'significant stress' as her GP put it (I accept, not 'clinical depression'). There was a 'perfect storm' of personal problems, including a financial crisis. On that subject, Mr Graham skilfully sought to present her payment of bills and dealings with bailiffs as a reflection of independence. It was not - rather it was a reflection of her financially struggling and fire-fighting. Therefore, I find in 2004-2005, by comparison to her previous determined individualism, exemplified by separation from Bill and university studies, the Claimant was relatively 'vulnerable'. However, I doubt that would have reached the high threshold of 'serious disadvantage through poverty, ignorance, lack of advice or otherwise' as required to claim 'unconscionable bargain' (Pakistan Airways at [24]). However, that does not mean that claim was 'bogus' as Mr Graham submitted, it simply means that on the evidence the Claimant would have failed to prove it.

390. I also accept Mr Graham's point that in mid-2005, the Claimant knew she had to do something about her financial situation and the Properties (although given they could have been sold - especially the Cinema - CPOs, bankruptcy or other loss of the Properties were a very small risk). The Claimant had largely (but not entirely) left them to Bobby and I find were it not for the Krishans ousting him in July 2005, she would have authorised him to continue, not dealt with it herself. When Mrs Krishan did persuade the Claimant to authorise Dr Krishan rather than Bobby, the Claimant was happy to hand over liaison with the Council - as she had previously done. She did not really want to be involved and had enough on her plate. As I said, she trusted Dr Krishan as an extension of her trust in Mrs Krishan. Whilst it was not the Krishans' case, I accept the four months between July and November 2005 it took for them to persuade her to agree to the transfer in principle illustrates perhaps best her independence and the fact this was certainly not a 'relationship of domination'. However, it is also clear that the Claimant was worn down by the 'stick' and 'carrot' of the Krishan's rescue narrative, including the four fraudulent misrepresentations I have accepted above, as she said:

Therefore, the fraudulent misrepresentations eroded the Claimant's independence.

391. I turn to the Claimant's 'involvement' with the Properties from July 2005 to April 2006. In fairness to Mr Graham, much of the rug from under his submissions has been pulled by my findings of fact (but I do stress in making them, I considered those submissions). I have found the Claimant accepted help from the Krishans in July 2005, not begged them for it. I have found that Dr Krishan came up with the idea of a development company and the transfers of the Properties to it, not the Claimant. As I say, I have found that she took some persuasion to agree in principle to transfer the Properties to a company over the four months between July and November, not proposed the idea and pestered the Krishans about it.

392. Nevertheless, I accept between November 2005 and April 2006, the Claimant attended more meetings than she accepted (including both with Mr Davies in November 2005 and SB twice in January and February 2006). Moreover, I accept she signed the transfers and later the stock transfer forms she earlier denied and has not pursued other allegations of forgery. Furthermore, I accept she also sent and received more correspondence about the development than she had accepted (including to Mr Whiston on 3^rd March authorising the transfers, his and SB's letters of 15^th March about the terms of transfer, her confirmation of the values to Mr Whiston on 24^th March and letters to and from him about the will).

393. However, at the end of the day, whilst I am wary of what findings I can make of the Davies meeting in November 2005, for those with SB in January and February 2006, the Claimant was essentially a 'passenger'. She contributed 'the odd point' as SB put it in evidence in 2010. The person driving the process was not the Claimant but Dr Krishan. Likewise, I have found that Mrs Krishan drafted for the Claimant to simply sign the 2006 letters in her name to Mr Whiston of 3^rd March, 24^th March on the transfers and 3^rd April on the will (although I accept the Claimant gave her own instructions on the will when she met him on 4^th May).

394. Turning to advice, whilst Mr Graham also relies on the Claimant's involvement with professionals to show she could get independent advice, in fact that was a problem. As the Claimant was a mere 'passenger' with SB who was actually involved in the transaction, she was hardly likely to seek independent advice from third parties like the Shropshire Chamber of Commerce (through whom she had instructed the surveyor of the Cinema in 2004) or advisers like Mr Matthews whom she instructed in 2008. Whilst she was supported throughout by Bobby, he had also been taken in by the Krishans' 'rescue narrative', just as she had. Therefore, understandably, on his advice argument, Mr Graham places most emphasis (both on actual influence and on rebutting any presumption of undue influence) on the exchange between the Claimant and Mr Whiston in April 2006. On receipt of the Claimant's signed transfers for the Shops, Mr Whiston then on 5^th April wrote to the Claimant to advise her that as he had previously acted for the Krishans and there may be a conflict of interest and she should seek independent legal advice about the transfer. The Claimant wrote back in her own handwriting on 6^th April confirming in terms that there was no conflict of interest in relation to the transfer from her to Gracefield. As Mr Whiston pointed out in his reply on 10^th April, that was not his point, but he took it as confirmation the Claimant was declining to get independent advice. Mr Graham points out that the Claimant's incorrect answer actually shows she felt there was no conflict of interest in the transfer itself, he submitted showing there was no undue influence.

395. In the presumed undue influence case of Smith v Cooper [2010] 2 FLR 1521 (CA) a woman transferred her home from her own name to that of herself and her partner for no consideration, then used that property to get a mortgage to buy another property, again in joint names. A solicitor involved throughout did not advise the woman at any point to get independent legal advice because he considered she did not need it, even though her instructions vacillated and she suffered from depression and panic attacks. In upholding her claim to set both transactions aside for undue influence, Lloyd LJ observed at [56]:

"So far as I can see, [the solicitor] acted and advised properly and with reasonable competence in his position as the solicitor instructed by, advising, and representing the two clients jointly. What he did not do, or purport to do, was to give any advice to Miss Cooper from her own separate point view and for her own separate benefit. This is, therefore, not a case in which Miss Cooper had any independent advice. The judge's comment that Mr Grimes did not know one client better than another 'and to that extent was independent' is not really to the point. What is meant, in this context, by independent advice is advice to and for the benefit the one party alone given by an adviser whose duty it is to consider the position that party and to advise her so she can give thought, free from any influence or dependence on the other party, as to whether she really does want to enter into the transaction, bearing in mind its full implications from her point view. The adviser, advising the party in question alone, must explain the nature and the consequences the transaction to that party with full knowledge of the relevant circumstances: see, for example, Snell's Equity... para 8–31. Mr Grimes was not in that position. It did not occur to him that Miss Cooper needed any such protection. He did not know the relevant underlying circumstances. He did not, and did not profess to, give Miss Cooper any advice as to her position separately."

396. It is true that Mr Whiston did not fall into the same trap as the solicitor in Smith. Whilst he did not purport to give the Claimant independent legal advice (indeed he explained why he could not do so due to the potential conflict of interest), he did advise her to get some. However, the difficulty with this point is that there were clear misunderstandings between Mr Whiston and the Claimant. As I have explained at paragraphs 219-227 above, Mr Whiston was not aware of any discussions about 'deferred consideration' of £200,000 or indeed a 50% profit share, even assuming that was agreed by the Claimant and Krishans, which I have found it was not. So far as Mr Whiston was concerned, the transaction was simply the transfers (split over the tax year) of the Properties for a total of £100,000, being 'the amounts placed on the properties by the council with regards to the compulsory purchase order'. So, just as the Claimant was misled by the Krishans' fraudulent misrepresentations, so too were SB and Mr Whiston. As a 'one-man band' high street solicitor, doubtless Mr Whiston could have researched CPOs, but it is very unlikely he would know about them off the top of his head. In any event, he had asked the Claimant to confirm the values, which she had ostensibly done on 24^th March 2006. Yet Mr Whiston perfectly reasonably misunderstood that too because I have found Mrs Krishan drafted that letter for the Claimant to sign (the same signature she and her husband later used in forgery). Mr Whiston did not know he was to all intents and purposes corresponding with Mrs Krishan.

397. Indeed, there was a further innocent misunderstanding by Mr Whiston. I have found at paragraph 226 that whilst the Claimant did hand-write the letter of 6^th April, it was dictated by Mrs Krishan. She did not have time to write a letter in the Claimant's name as usual, as they were in a rush before they went to India, as another Mrs-Krishan-drafted letter said dated 3^rd April 2006 for the Claimant to sign to instruct Mr Whiston on the will. Yet even if I am wrong, whoever composed the 6^th April letter, did not answer Mr Whiston's question and so failed to address whether the Claimant wanted independent legal advice. Certainly, the Claimant did not realise that and if she did, she even let the other party to the transaction dictate her response. Therefore, whilst I agree with Mr Graham that the Claimant's handwritten letter of 6^th April is 'particularly significant', it shows the opposite of what he claims. Far from showing the Claimant clearly not under influence of another person, it demonstrates her writing a letter at Mrs Krishan's dictation. This suggests that, in Ward LJ's words in Drew, that far from her response that there was no conflict of interest in the transfer being 'the offspring of her own volition', it was literally 'the record of someone else's'.

398. Indeed, this last point is demonstrated throughout by revisiting the development of the relationship of trust and confidence between the Claimant and the Krishans discussed in the last section, but now including how the fraudulent misrepresentations I have upheld fitted in. I deliberately left those to one side when summarising

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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Takhar v Gracefield Developments Limited & Ors [2024] EWHC 1714 (Ch) (03 July 2024) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2024/1714.html Cite as: [2024] EWHC 1714 (Ch)

England and Wales High Court (Chancery Division) Decisions