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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Jackson & Ors v Thakrar & Ors [2007] EWHC 2173 (TCC) (10 October 2007) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2007/2173.html Cite as: [2007] EWHC 2173 (TCC)

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In the High Court of Justice
Queen's Bench Division
Technology and Construction Court
HH Judge Thornton QC

		Technology and Construction Court St Dunstan's House 131 – 137 Fetter Lane London EC4A 1HD
		10 October 2007

See also: [2007] EWHC 2173_2 (TCC)

Index

Chapter	Para
Summary of Conclusions	1-15
1. Introduction	1-21
2. The Parties to the Thakrar Litigation	22-23
3. Glen, Teso and Mr Harjivan Issues	24-27
4. Why were Ramila's and Vijaya's names used?	28-96
5. Why was Glen formed and who beneficially owned its shares after its formation?	97-151
6. Teso's Formation, Control, Charges and Beneficial Ownership	152-157
7. Did Mr Harjivan acquire Legal and Beneficial Ownership of Glen and Teso c. 2000 or 2001	158-393
8. The Validity of the Teso Charges	394-418
9. Which Transactions involving Glen and Teso are Void or Voidable?	419-448
10. Factual Background to Trial no.1 and Compromise of SPC's claims brought against Ramila and Glen	449-519
11. Trial no. 1 an Abuse of Process?	520-599
12. SPC's Compromise with Glen	600-673
13. Court of Appeal	674
14. Contribution	675-684
15. Administration	685-833
16. Abuse of Process and Recusal	834-944
17. Outstanding Questions	945
18. Note of Subsequent Events	946-947

Summary of Conclusions
1. Ramila and Vijaya were never intended by Subhash to acquire the beneficial ownership or any interest in any of the properties transferred into their name nor their proceeds of sale; neither of them provided any consideration for the acquisition of any of them, were ever consulted by Subhash as to their acquisition, the funding of that acquisition or any decision as to their management or disposal and were never informed of the fact that they had been acquired in their names. Subhash at no time ever accounted to them for these properties..
2. The registration of these properties into Ramila and Vijaya's names did not have the effect of passing beneficial ownership of the properties to them. Neither provided any consideration for these transfers and both were in complete ignorance of them.
3. Glen was formed by Subhash to be the property owning vehicle of all properties he considered himself to be the beneficial owner of including all properties registered in Ramila and Vijaya's names. The purpose of forming Glen was as a tax saving device and so as to protect the dishonestly acquired assets from third parties.
4. Shares in Glen were issued to Ramila and Vijaya as nominees for Subhash. They provided no consideration for the shares and were in complete ignorance of the transactions that transferred shares into or out of their names. They received no consideration for any transfer out of their names of any shares. The same absence of knowledge and of any provision of, or receipt of consideration for transfers of shares into or out of her name applied in relation to Teso for Vijaya.
5. Prior to 2000, Glen and Teso were beneficially owned by Subhash, were considered by Subhash to be beneficially owned by him and were considered by the directors of both Glen and Teso to be beneficially owned by Subhash, albeit that such assets were subject to SPC's overriding interest and tracing rights.
6. Subhash had complete management control of Glen and Teso and acted throughout as beneficial owner in all respects. The directors of both companies only performed such functions as Subhash directed them to perform and never questioned or challenged any of his directions or decisions.
7. Mr Harjivan never acquired any beneficial interest in either Glen or Teso or in any shares issued by either of these companies.
8. There was never any sale or sale agreement whereby Vijaya or Ramila sold shares in Glen or Teso to Mr Harjivan and Mr Harjivan bought shares from Glen or Teso; nor in respect of Teso to his son Mitesh Mahindra.
9. Vijaya and Ramila never received any consideration for, or had any knowledge of, the sale of any shares in Glen or Teso to Mr Harjivan or in respect of Teso to his son, Mitesh Mahindra.
10. From 2000 until the appointment of administrators, the management of Glen and Teso has remained with Subhash who has continued to control these companies through the unquestioning following of his instructions by the directors and by those working at the offices of SKT and SKTL.
11. The conduct of the Thakrar Family members, save for Ramila and Vijaya, in the Family Actions was deceitful and had every appearance of being an abuse of process. These members were funded by Glen at Subhash's direction.
12. The appointment of administrators was undertaken by the directors of Glen for an improper motive and is liable to be directed to cease under paragraph 81 (1) of Schedule B 1. Furthermore, it appears that the directors never decided to appoint since no meeting occurred on 13 April 2007, albeit that Mr Shelton signed the draft minutes in the presence of, or at the request of, Subhash. No notice was given to Teso of the intention to appoint, the giving of notice is a condition precedent to appointment and the failure to give notice may not be waived or condoned by the chargeholder or the court. It would seem that the Teso floating or qualifying charge was not unenforceable as provided for in Schedule B 1. Furthermore, Glen did not qualify for administration on 13 April 2007 because it was not a company unable to meet its debts as they fell due.
13. The trial was not an abuse of process and the trial judge is not required to recuse himself. There are no grounds for a declaration of a mistrial or for an order for a new trial or for an order that the judge should recuse himself.
14. There is no basis for Subhash to contend that he has outstanding contribution claims against Parties 2 and 4 or for his seeking to direct the Trustee to maintain or commence such claims.
15. Shantaben has had no relevant knowledge of any part of the Thakrar Litigation but Subhash, and since 26 March 2006, Sheela in addition, have acted for her throughout pursuant to general powers of attorney. Her involvement in the actions is not a sham. However, any attempt to make her personally liable may well be met by a plea of undue influence or non est factum in relation to her signature on any power of attorney or other legal document.
JUDGMENT No. 5

Introduction

1.1 Overview

16. This judgment is the fifth judgment in what has become known as the Thakrar Litigation which has so far involved three trials with at least one further trial^[2] and an extended costs hearing still to come. This litigation is now, in 2007, in its eleventh year. It was started when Subhash Thakrar ("Subhash"), suing in the name of his then accountancy practice, S K Thakrar & Co ("SKT"), issued the writ in the lead action on 4 December 1996 in the Colchester District Registry claiming allegedly due and unpaid professional accountant's fees and compound interest. Additional claims and Parties were added to or directed to be tried with this action as the lead action. This action led to trial no. 1 which culminated in judgment no. 1 that was handed down on 29 September 2004 and judgment no. 2 that was handed down on 20 December 2004. The subsequent litigation has been concerned with the procedural, enforcement and other related consequences of judgments nos. 1 and 2. This litigation has spawned a number of additional actions and applications which have been directed to be heard or tried together. In order to identify the scope of this subsequent litigation, a fresh claim form was issued which was directed to be the vehicle or umbrella encompassing all actions, disputes, claims and applications that had either led to judgment nos. 1 and 2 or which had subsequently arisen out of, or were connected with, the original action and the Family Actions. This composite and consolidating claim form, issued on 29 June 2006, describes all these various strands brought together into the current action of what is now referred to as "The Thakrar Litigation". The present judgment, being no. 5 in the series of the Thakrar Litigation judgments, is the judgment following the first, fact-finding trial of the current set of actions and applications and was handed down after trial no. 2.
17. The Thakrar Litigation now consists of twenty separate Parties. Five of the Parties consist of two or more separate individuals so that, in total, trial no. 2 has involved 29 separate individuals or companies. These Parties are grouped broadly into two camps, those claiming relief of some kind, who became known collectively as "the claiming Parties", and those resisting or defending any of these claims, who became known collectively as "the defending Parties". Only one Party, Glen International Limited ("Glen") has adopted a apparently neutral stance. That neutrality was changed into a stance wholly supporting the defending Parties for a period at a late stage in trial no. 2 but, on the purported appointment of administrators, Glen ceased to be an active participant.
18. The Thakrar Litigation is a hybrid action. The actions of, and the documents associated with, Subhash lie at the heart of all parts of the Thakrar Litigation. He was the principal Party at trial no. 1. He was addressed and referred to as Subhash throughout the Thakrar Litigation and trial no. 1. Many other Thakrar family members, and members and relatives of the Hughes-Narborough family are also Parties to the Thakrar Litigation and they are all similarly referred to by their first names to avoid undue repetition of the Thakrar and Hughes-Narborough family names. Another principal Party, Mr Harjivan, is not a Thakrar family member and he, as with other non-family members of either family, was referred to throughout the trial more conventionally by his title and surname. I will adopt the same convention for these various names in this fact-finding judgment no. 5.
19. There are two reasons for this topsy-like growth in the range of, and number of Parties involved in the Thakrar Litigation, the complex factual subject-matter of all the disputes is linked and the need to decide the disputes of fact in a way that avoids the need for any of the disputed facts having to be re-litigated. Overriding these two objectives has been the need to provide a dispute resolution forum that enables all the related disputes to be decided in the most proportionate and cost-effective manner given that the resources of most of the Parties are extremely limited.
20. Trial no. 2 of the Thakrar Litigation evolved into one that lasted for thirty-two days that were spread over thirteen months from 3 July 2006 until 24 September 2007. This prolonged and disjointed trial was brought about by a series of developments which led to the introduction of new issues, Parties and procedural applications. In order to provide a structure and a workable framework to the many disputes that must be decided, I directed that trial no. 2 should be confined to a fact-finding exercise with the aim of my deciding the material disputed facts in a way that will bind all Parties. Following the handing down of this fact-finding judgment no. 5, a further trial, which will be trial no. 4 and which will be concerned with the consequences of those facts, will follow.^[3] This consequences trial will cover all claims, applications and disputes arising out of the Thakrar Litigation that the Parties have not been able to resolve following the handing down of this judgment no. 5^[4].
21. One of the causes of the prolongation of the trial was the need for an adjournment of trial no. 2 while there was tried by another judge, Judge Coulson QC, the issue as to whether, at a late stage in the trial, all Parties had compromised the entirety of the Thakrar Litigation in an out of court, informal final and binding settlement agreement. It was necessary for this issue to be tried by Judge Coulson as trial no. 3 because all Parties were concerned to ensure that I, as the trial judge of the Thakrar Litigation, did not become aware of the details of the negotiations leading up to the alleged settlement if it turned out that no binding settlement took place and judgment had to be given in relation to the Thakrar Litigation. Strictly, it was not necessary for the compromise issue to be tried by a different judge, even if the negotiations leading up to the alleged settlement were conducted on a without prejudice basis. However, I exercised my case management powers to direct a trial by a different judge so as to avoid any subsequent suggestion of prejudice or bias if I had to determine the entirety of the disputes between the Parties having learnt of the details of what had turned out to be an abortive settlement negotiation.
22. This compromise issue was tried by Judge Coulson QC in January 2007 and he handed down judgment on 20 February 2007 and a subsequent costs judgment on 22 March 2007. These were judgments nos. 3 and 4 in the Thakrar Litigation. Judge Coulson decided that the Thakrar Litigation had not been compromised. At the request of the Parties, I have only read Judge Coulson's judgment no. 3 in a redacted form with the redactions having been agreed by the Parties.
23. Following Judge Coulson's judgment, trial no. 2 was resumed but was again subject to a prolonged interruption by Glen, a vital Party to the overall litigation. Initially, Glen instructed leading counsel to pursue a full-blown recusal application for which other defending Parties indicated support. The application was based, so I was informed, on allegations of my actual and presumed bias and judicial incompetence in conducting the trial, the alleged unfairness to the defending Parties caused by the disproportionate inequality of arms between the claiming and defending Parties and irredeemable prejudice to them resulting from the trial having become unmanageable. As a result, so it was alleged at that stage, the trial had become an abuse of process. At a late stage before these recusal applications were due to be heard, Glen and most of the other defending Parties withdrew their applications. However, three of the defending Parties, Subhash, Mr Harjivan, and Party 16, SKTL ("SKTL"), informed the court that they were persisting in their abuse of process applications but accepted that they could be determined as part of the overall judgment on the basis of the written materials already served by all Parties.
24. One reason for Glen dropping its recusal application was that its directors purportedly resolved on 13 April 2007 to place Glen in administration and they claimed to have made an out of court appointment of administrators. This resulted in a second cause of the trial's prolongation. This appointment initially had the temporary effect of the proceedings against Party 14 being stayed automatically. This, in turn, prompted to two applications by the claiming Parties, albeit these were mounted by Parties 1 and 4. The first application was for an order lifting the stay at least in relation to the remaining stages of trial no. 2 including the handing down of judgment and the settling of the order consequent upon that judgment. This application was not opposed by Glen's administrators and I readily granted it. The second application was advanced by Parties 1 and 4 and was made under paragraph 81 of Schedule B1 to the Insolvency Act 1986. This application was to the effect that the administration was engineered by Subhash, who had no role or involvement in the affairs of Glen, and was in any event voted on and initiated by the directors of Glen with an improper motive so that the administration should be set aside with effect from 13 April 2007. The hearing of these applications and a further application by Parties 1 and 4 challenging the validity of the purported appointment of joint administrators prolonged the trial by four further hearing days with further written submissions and extended the overall length of the trial by seven further months.

1.2 Thakrar Litigation

25. Subhash is a central participant in all aspects of the Thakrar Litigation but he has not taken an active part in the trial. He is now bankrupt. His trustee in bankruptcy is, of course, a Party to the Thakrar Litigation but Subhash is a separate Party in his own right. He was summoned to give evidence but on entering the witness box and in the presence of counsel he had instructed to accompany him to court, he declined to answer any questions on the grounds that he might incriminate himself. He was otherwise unrepresented during the Thakrar Litigation although he took to bombarding the court and the Parties with unsolicited e-mails containing huge quantities of submissions, comments, prejudicial and sometimes scandalous allegations and assertions all of which protested his innocence of any wrongdoing whilst accusing the claiming Parties and, for those Parties who were represented, their representatives of all manner of dishonesty and bad faith. Thus, although Subhash and his actions have formed a major part of the investigation at the trial, he has played no significant part at the trial itself.
26. There are now seven different groups of proceedings being advanced in the Thakrar Litigation. These are, in summary:

(1) Claims and applications that directly or indirectly seek to enforce money and costs judgments that were entered in favour of Parties 2 and 4 following the earlier trial.

(2) An application or claim by Suburban Property Company Ltd ("SPC") to set aside a compromise agreement of its claims against Glen and Ramila in the earlier litigation on the ground that that compromise, which would otherwise be a bar to its current claims, was procured fraudulently.

(3) There are two sub-groups of applications in this group of applications:

(i) Applications by Ramila and Vijaya to set aside default judgments against them that they allege were irregularly entered against them in favour of Party 4; and

(ii) Applications by Party 4 whose effect is to seek to set aside or vary some of the orders made following the earlier judgment.

(4) Restitutionary and tracing claims advanced by several Parties that are based on the same factual background as the other proceedings embraced by the Thakrar Litigation.

(5) Applications made by all the defending Parties that seek to obtain my recusal or to set aside, stay or put at an end to the current proceedings. These applications are based on allegations that I am biased and that these proceedings amount to an abuse of process or are otherwise irredeemably tainted or procedurally flawed.

(6) Applications arising out of Glen's "administration".

(7) Applications of a procedural nature that principally relate to the consequences trial, if the result of this judgment is that such a trial has to take place on a later occasion.

27. The procedure that I decided should be adopted for this trial is one similar to that in use in proceedings involving children in the Family Courts. The procedure breaks the trial down into two parts and two separate trials. The first trial is a purely fact-finding trial which will make findings in relation to all material facts contended for by each Party. These findings will be made by way of a general declaration allied to a detailed schedule of factual findings that will be scheduled to the order giving effect to the judgment. The second trial, which will be trial no. 4, will be a trial to determine the consequences of the findings of fact identified in trial no. 2. These consequences will particularly involve a determination of what relief any Party is entitled to and which defences put forward by any Party are effective.

1.3 Judgment No. 1

28. I will not attempt to summarise my findings in, or the background to, my earlier judgment no. 1. This fact-finding judgment no. 5 should be read with judgment no. 1. It is, however, helpful, to state briefly the conclusions to which I came. Judgment no. 1 was essentially concerned with the joint venture that I held had been operated by Subhash and Neil between 1983 and 1987 for the purpose of developing and selling properties for their sole benefit which had been misappropriated from William's Estate and SPC Property Company Ltd's ("SPC") property portfolio. SPC was a Hughes-Narborough family company which held a large South London residential property portfolio for investment purposes and both SPC and the portfolio were exclusively managed by Neil as an adjunct to his family solicitor's practice. Subhash's role was undertaken as an adjunct to his accountant's practice, one of whose clients was Neil's firm through whose clients' account the proceeds of this development venture passed. The principal claim brought by SPC related to the remaining portfolio that was dishonestly acquired from SPC by Subhash in the name of a Thakrar Family member, Ramila. The trial was also concerned with claims that were made by several Thakrar Family members against Neil's Estate. Neil died in 1995 and the Thakrar Family members pursued claims against his estate for alleged failures by Neil to account to them for the proceeds of sale of some of these misappropriated properties which had been conveyed into their respective names. Finally, the trial was concerned with whether Subhash had any surviving claims for outstanding accountancy fees and accumulated interest. These were pursued against SPC, Neil's estate under alleged guarantees and two other alleged guarantors of this liability, Kenneth and Rosemary.
29. The effect of judgment no. 1 was that SPC succeeded in full in recovering its claims from Subhash, Subhash succeeded in recovering a small part of his fees claim against SPC but failed to recover anything from Neil's estate, Kenneth or Rosemary and the other Thakrar family members, save for those brought in the names of Ramila and Vijaya, failed in their claims against Neil's estate. Ramila and Vijaya's claims had been struck out during the trial and a default judgment was entered against each of them. Essential to the judgment in favour of SPC were findings that Subhash had acted dishonestly and fraudulently in procuring the sale of SPC's property portfolio into Ramila's name. SPC's claims against Neil's estate and Glen were compromised before Part 1 of trial no. 1 in two separate compromise agreements entered into separately and at different times. SPC is now seeking to set aside the compromise agreement with Glen and Ramila it was a Party to on the grounds that it was procured by fraud or fraudulent misrepresentation.

1.4 Subsequent Claims and Proceedings

30. SPC obtained a monetary judgment against Subhash for principal and accumulated interest of a sum a little in excess of £4.1 million as well as its costs and Party 4, which included Neil's estate, recovered their costs of successfully defending the Thakrar Family members' claims from Subhash and the other Thakrar family members. Following that judgment, Subhash initially attempted to enter into an Individual Voluntary Arrangement and when it failed, then presented his own bankruptcy petition. Both steps appear to have been ploys undertaken in an attempt to avoid any significant payments being made to the judgment creditors. No-one has yet recovered anything from him or his estate and Party 4 has not recovered anything from the other Thakrar family members because the interim payment on account of costs ordered by me as part of judgment no. 2 is presently held in court under an order of the Court of Appeal.
31. The full range of claims and applications now made in the Thakrar Litigation have arisen out of attempts by Parties 2 and 4 to recover at least some of the sums due to them and out of Ramila and Vijaya's applications to set aside the default judgments and consequent costs and other orders entered against them. They rely on similar grounds to those that Party 4 contends for in support of its applications to vary the original orders made in their favour at the original trial. Party 4 wishes to have it made clear that the Thakrar family members' claims were always shams and an abuse of process and were brought by Subhash for his own purposes.
32. These applications are advanced by Party 4 following their discovery, as they allege, of significant new facts which they were not aware of, and could not reasonably have been expected to have been aware of, at the time of the original trial. Party 4 alleges that these new facts show that the Thakrar family members' claims were advanced entirely in their names by Subhash and that he was using the family members' actions purely for his own benefit. These applications have some additional significance because the Thakrar family members were granted permission to appeal significant parts of the judgment entered against them and that appeal has been directed by the Court of Appeal to be stood over to await this fact-finding judgment. Party 4 alleges that the appeal is misconceived and an abuse of process because the original claims brought by Thakrar family members were themselves abuses of process.
33. However, the major issue in the Thakrar Litigation relates to the question of who is the beneficial owner of the shares in Glen and Teso International Group Ltd ("Teso"). Most of the appropriated properties were transferred into Glen's name in the 1990s. This company is a Liberian registered company allegedly managed by a Jersey-based management company that was set up in 1989, one year after Subhash had procured the transfer of all the remaining properties in SPC property portfolio into Ramila's name. Subhash also procured the transfer into Glen's name of various other properties that had previously been beneficially owned by SPC. Teso was subsequently set up, so the claiming Parties allege, by Subhash, so as to enable these dishonestly acquired properties to be hidden and "protected" from SPC and the Inland Revenue.
34. Glen's shares were, unbeknown to Ramila and Vijaya, originally registered in their names but were subsequently transferred into Mr Harjivan's name. The claiming Parties contend that these transactions were shams that were made for nil consideration and that Subhash was always, and remains, the sole beneficial owner of these shares. Mr Harjivan contends that he is the beneficial owner of these shares having acquired them at arm's length from Ramila and Vijaya for approximately £12m. Thus, Glen faces claims from two directions. Subhash's Trustee claims declarations that she, through Subhash, is the beneficial owner of Glen's shares so as to enable her to realise Glen's assets for the benefit of Glen's creditors, including SPC, and, to claim a distribution of any net assets or their value for Subhash's estate and his creditors, also including SPC. Meanwhile, SPC claims the return of, or restitution for, the properties it alleges were dishonestly put into Glen's name by Subhash so as to warehouse them. This information is said to have surfaced during Subhash's bankruptcy proceedings. These claims are, in part, enforcement proceedings and, in part, direct claims seeking tracing and restitutionary remedies.
35. SPC has been joined by the trustees of William's estate who likewise seek tracing and other equitable remedies against Subhash, Glen and Teso because Neil and Subhash's joint venture wrongly misappropriated properties subject to a will trust in favour of William's beneficiaries and those properties and their value may now, it is alleged, be traced into the properties now registered in Glen's name. In addition, Ramila claims, for herself and her family, an account and reimbursement or damages together with interest equivalent to the monies representing her family's savings held in accounts under a power of attorney given to Subhash for that purpose and appropriated by Subhash. In judgment no. 1 I found that Ramila's savings had been appropriated in November 1987 by Subhash, applied as part of the payment to the Inland Revenue on behalf of SPC, and treated or accounted for as the deposit paid for the SPC portfolio^[5].
36. Finally, the purported administration is challenged on the basis that it is invalid or was allegedly voted for by Glen's directors at Subhash's instigation as a last-ditch attempt to stymie the claiming Parties' attempts to recover or trace into, the properties dishonestly transferred into Glen's name by Subhash. The claiming Parties seek to set aside the decision to place Glen into administration on the grounds that that decision was taken for ulterior, dishonest overriding reasons and it should therefore be set aside or cessated. Directions are also sought on all sides as to the administration and as to what should happen if the administration decision is declared to be invalid or cessated.

2 The Parties to the Thakrar Litigation

37. The Parties to the Thakrar Litigation fall into two groups, the claiming and the defending parties. The claiming parties consist of Subhash's Trustee in bankruptcy, Neil's Estate and Barbara Harris in her personal capacity, Neil's father's Estate and SPC and its two directors, respectively Neil's brother Kenneth and Rosemary Campbell. It also includes Ramila Bhojani and her sister Vijaya Radia who are maternal cousins of Subhash and his siblings.
38. The defending parties consist of Subhash and his five siblings being Mukesh, Vijay, Kishan, Sheela and Naina and their mother Shantaben. The other parties are Glen and Teso which were set up to manage and protect the property portfolio that Subhash dishonestly acquired from SPC. A crucial player in action no. 2 is Mr Harjivan who claimed to have bought the shares in Glen and Teso from Vijaya. The Trustee claims the beneficial interest in those shares for Subhash's Estate. There are also two Thakrar companies set up after Subhash's bankruptcy and the demise of his sole practice, being SKTL which inherited his accountancy practice, and Simply Lettings and Management Ltd which took over SKT's lettings and property management business. Finally, there were two professional parties. Firstly, there were the two Receivers appointed under charges held by Teso over Glen and Subhash's properties and who were removed from office during the trial by order of the court and two administrators of Glen who were appointed on 13 April 2007 during a late stage of the trial.

3 Glen, Teso and Mr Harjivan Issues

39. The issues and the relevant disputed facts arising out of the role of Glen may be shortly stated but are, in reality, the most important of the issues and disputed facts that I must decide. The issues boil down to these:

(1) Why were properties transferred into Ramila and Vijaya's names and who beneficially owned them following the transfer (Part 4 below)?

(2) Why was Glen formed and who beneficially owned its shares (Part 5 below)?

(3) Why was Teso formed and who controlled and beneficially owned its shares (Part 6 below)?

(4) Was the legal and beneficial ownership of Glen and Teso's shares validly transferred to Mr Harjivan in 2000? (Part 7 below).

(5) Who currently controls and beneficially owns the shares in Glen and Teso (Part 8 below)?

(6) Which transactions involving Glen and Teso are void or voidable (Part 9 below)?

40. The following evidence is available in order to decide these issues:

(1) The written and oral evidence of Ramila, Vijaya, Mr Harjivan, Mr Shelton and Mr Barby and, to a limited extent, Mukesh and Vijay;

(2) The accounts and working papers of Glen and Teso;

(3) The contents of the letters and other documents written by Subhash drafts of which were found on his hard drive on both occasions when the Trustee's search and seizure warrant was executed;

(4) Evidence and findings in judgment no. 1; and

(5) Inferences to be drawn from Subhash's inconsistent and demonstrably false evidence given during trial no. 1, in his unsworn statements made in recent e-mails to the court, in his failure to give evidence during trial no. 2 by claiming immunity from answering any question in reliance on his privilege not to incriminate himself.

41. This evidence can be analysed under several headings. I propose to analyse the salient evidence under these headings:

(1) The purpose of setting up Glen and Teso;

(2) The direct evidence of the witnesses;

(3) Inferences to be drawn from particular events or transactions involving Glen or Teso; and

(4) General inferences.

This analysis will be undertaken following my conclusions in relation to Parts 7 – 11 below.

42. I will, however, first provide a summary of the relevant history of events to enable this evidence to be considered in context.

4 Why Were Ramila and Vijaya's names Used?

4.1 Background

43. Thakrar family. The relevant history is to be gathered principally from judgment no. 1, the contents of which were not challenged in any evidence adduced at the fact-finding trial. Subhash is, and has been since April 1985 when his father Kanji died, the head of an extended Indian Gujarati family with branches in England, East Africa and India. Subhash's parents came to England from East Africa and his mother, Shantaben, is over 80 and lives with Subhash's sister Sheela. Subhash is the eldest of seven siblings and five of these form the group of Thakrar family members who are Parties to the Thakrar Litigation.
44. Subhash's maternal aunt, Jayaben, remained in Tanzania until her tragic death in 1982 when she was murdered. Her husband, Laljibhai, died in 1973. Jayaben and Laljibhai had eight children, cousins of the seven Thakrar siblings. Five of these siblings were daughters, including the two eldest siblings, Vijaya and Ramila, and three sons, Bhikhu, Nilesh and Shimeer and three further daughters. Ramila and Vijaya play a prominent role in the Thakrar Litigation. Ramila used to live in Tanzania but, between 1984 and 1986, she lived abroad in Portugal and India. In 1990, she met and married her husband, Babu who lived in England and since her wedding reception in January 1991 she has lived with her husband in England.
45. After living in Wellingborough and Sidcup, Ramila and Babu bought a house in Mottingham, London, SE9 in 1995, which is now the subject of a charging order imposed at the behest of Party 4 in an attempt to enforce the costs order against her which was imposed in her absence when the claim in her name against Neil's estate was struck out. Ramila's application to remove this charging order is included within the Thakrar Litigation.
46. Meanwhile, Vijaya has, for many years since marrying her husband Lalit Radia in 1976, lived in Kisumu, Kenya in modest circumstances. Kisumu is located in Western Kenya on Lake Victoria. Lalit worked for many years as a salesman for a small local company but this closed down in 1998 and since then he has kept a small grocery shop. Ramila speaks English to a limited extent and Vijaya speaks no English. Ramila and Vijaya have always been on the fringes of Subhash's extended Thakrar family and his responsibility towards them does not appear to have extended beyond providing advice and comfort. He does not appear to have provided them with financial assistance save for paying for Vijaya's journey to India when she accompanied her husband when he went there for medical treatment in 2001. However, he appears to have used their names, with the assistance of powers of attorney he obtained from them, in many of the material transactions with which I am concerned.
47. Subhash's joint venture with Neil and William's Estate properties. Judgment no. 1 found that a joint venture would be established which would develop properties using funds provided equally by both men and the net proceeds of sale would be regarded as being owned by them jointly and shared equally. The properties would be registered in the names of those nominated by Subhash but no distribution of the proceeds of sale of that property to whoever's name it was registered in would take place. The individuals into whose name the freehold was passed were to be no more than nominees who took no part in the management of the properties and who would not receive any part of the consideration earned from selling long leases of flats within the properties. That consideration would be paid into the running account held by Neil on behalf of both participants in the joint venture and the net profits split 50/50 between the two.
48. What Subhash did with the money received in this way was something for him to sort out with his siblings and other family members contributing to the pot. Given how the two men worked this joint venture, it would seem that, in Subhash's mind, the monies he received from Neil would be paid into the general pot or used for subsequent purchases by the joint venture. Those monies were certainly not intended to be paid to the individual in whose name a particular property was registered. Registration was a "flag of convenience" and different names were used so as to spread the incidence of capital gains and other taxes. The attraction of a family member domiciled and resident outside the jurisdiction was that the proceeds of sale of properties registered in such family members' names would not attract any tax on a disposal and other tax advantages accruing to the income earned from the property by what would appear to be a non-resident overseas domiciled property owner^[6].
49. From the start, Subhash was aware that those properties that were provided to the joint venture by Neil from, initially, William's estate and, from about March 1986, from SPC, were not his to provide. Thus, Subhash knew that the thirteen flats in two adjacent streets that remained in William's estate formed part of that estate, that Neil was the sole effective executor and that he was not entitled to be a Party to the transfer away from the estate of these properties for no consideration. The justification, in Subhash's mind, for participating in what was a deliberate and unjustified breach of trust and in agreeing to share the proceeds of sale with Neil personally was:

"[The properties in question], emanating from William's estate, were part of a larger holding which had already been partially disposed of. They consisted of 13 separate flats in two adjacent streets and were in appalling condition. Most were empty and the rest had sitting tenants in occupation. They were all subject to, or would be subject to, Housing Act Notices. They were virtually unsaleable and Neil and William's estate, which Subhash was aware of, could not afford to renovate them into a saleable condition."^[7]

50. These properties were refurbished using funds provided 50/50 by Neil and Subhash. These funds were paid into, and then out of, the joint venture account. At least £70,000 was paid in this way, albeit that the work was poorly managed and was carried out in consequence in a grossly uneconomic and unplanned manner. Following refurbishment, these properties were then "sold" to family members in the sense that they were transferred into the names of family members and then, in some cases, long leases were sold on to third Parties and the proceeds of sale credited to Neil and Subhash's joint venture. According to Subhash's evidence that he gave during trial no.1, each "sale" was notionally for a small sum, £5,000 per unit, but no money passed from the family members to the Estate or to Neil and Subhash. Even on Subhash's version of the arrangement, this consideration was to be deferred and paid by way of deduction from subsequently acquired proceeds of sale. By June 1986, 8 of these properties had been sold yielding gross proceeds of sale of £251,555 the entirety of which went into the joint venture account.
51. There was some delay before these properties were transferred into the names of individuals in the Thakrar extended family. There was no formal conveyancing undertaken, many of the documents are no longer available and the registration process was undertaken in a somewhat haphazard way by Neil. Thus, it is not possible to give precise dates when any particular property in the early years was formally transferred into and registered in the name of a Subhash nominee.
52. The approximate date of these early transfers and registrations were as follows: 27 Gurdon Road, into Naina's name in March 1984; 33 Gurdon Road into Sheela's name in September 1984; 35 Gurdon Road into Mukesh's name in December 1984; 39 Gurdon Road, first into Kanji's name in November 1984 and subsequently into Shantaben's name; and 29 Gurdon Road into Vijay and Kishan's joint names in January 1985. Two properties were transferred into Vijaya's name. 4 Fairthorne Road on 15 November 1984 and, much later, 31 Gurdon Road on 1 June 1993.
53. The five Thakrar family members who gave evidence all gave remarkably similar evidence. I will summarise this evidence.
54. Mukesh. In his evidence, Mukesh stated that in about 1983, when he was in his 20s, his father and Subhash informed him that the family would be purchasing a number of properties from Neil and that he would be purchasing one of them. Mukesh had no say in which property would be purchased by him. The purchase price would be paid for out of the proceeds of sale and the rental income. Subhash would be arranging for the builders to renovate the property. He had no choice in the matter. Mukesh had no role in any of the renovation work and, so far as he understood the arrangements, these were paid for out of family funds under the control of his father and Subhash. As with other family members, Mukesh had contributed to this pot out of his earnings. Subhash then arranged for the flat to be put on the market. Mukesh stated that he raised with Subhash over the following years the fact that he had not received the net proceeds of sale of the two flats which the house was converted into and he said that he would take it up with Neil. He never received any proceeds of sale. Subhash started proceedings in his name in September 1998 to recover the proceeds of sale from Neil's estate.
55. Vijay. In his evidence he gave a very similar account of how he and his brother Kishan purchased jointly a property for £10,000 in 1983. Subhash made all the arrangements, gave them no option about the purchase, decided which property would be registered in their names and stated that the proceeds of sale would be used to fund the purchase. He left Subhash to sort everything out. He likewise asked Neil about the proceeds of sale intermittently over the years and always received the answer: "don't worry, I will sort it out". The claim against Neil's estate was started at the same time as the claim made by Mukesh, albeit in separate proceedings and apart from providing information about the figures, Vijay had little involvement in those proceedings.
56. Naina. Her evidence was very similar to that of Mukesh and Vijay. She did contribute to the family pot from her earnings and she also provided some details for the proceedings at the request and with the assistance of Subhash.
57. Sheela. Again, her evidence was very similar to that of Mukesh, Vijay and Naina. She also contributed to the family pot from her earnings. It was pointed out to her that some years after the property had been purchased in her name, Subhash pledged it with other properties as security for a loan that a bank was providing to SPC. Her view was that it was acceptable to her for Subhash to use the property to secure a loan for appropriate purposes for the immediate family but not otherwise. She had no view as to whether this particular use of the property was for appropriate family purposes and ended by stating that she left him to use her property's name whenever he needed to use it. Subhash did everything in connection with the starting of proceedings to recover the proceeds of sale some years later.
58. Kishan. His evidence mirrored Vijay's evidence and he could not explain how any of the figures in the claim started in his and Vijay's joint names came to be prepared.
59. Shantaben. She gave a witness statement but was too frail to come to court and give oral evidence. She stated in her statement that she had no knowledge as to how her deceased husband had come to purchase the property in his name and no-one had ever accounted to her for the proceeds of sale.

4.2 Ramila and Vijaya

60. Properties in Ramila's name. The first property to be transferred into Ramila's name was 23 Gurdon Road on 6 June 1986. This was not a property taken from William's estate but was the first property taken from SPC. Eleven other properties followed after this into Ramila's name between June 1986 and March 1988. These properties were also taken from SPC.
61. Bhikhu, one of Ramila's brothers, had three properties registered in his name in this period. Bhikhu tragically died in a swimming accident in 1986^[8]. A mysterious name, Jagani, had five registered in his name. Subhash on an earlier occasion gave evidence that Jagani was a business contact of his brother-in-law who was known to Ramila in East Africa. According to this evidence, Jagani had orally transferred or assigned his interests in these properties in East Africa in 1987 to Ramila and was paid by Ramila for them in the country of transfer. Ramila stated categorically in evidence that she had never heard of Jagani and had never received any properties from, nor paid anything to, anyone of that name^[9]. These five properties, or at least some of them, appear ultimately to have been registered in Glen's name and those that were so registered were probably registered in Ramila's name at some stage after 1986 given Subhash's evidence about the assignment^[10].
62. Ramila's evidence. Ramila gave evidence at length and on several different days during the fact finding trial. Her history and the limited direct contact she had had with Subhash before 1985 are highly material. She was born in 1949 in Tabora, Tanzania and her mother tongue is Gujarati. She speaks English, albeit not fluently, and was able to give her evidence with the aid of an interpreter. Ramila is Hindu. Ramila is the second oldest of the eight children, Vijaya is the eldest, and Shimeer is the youngest having been born in 1969. He speaks fluent English and has settled in England. He has acted as Ramila's McKenzie friend whilst she gave evidence, sitting near her but not prompting or discussing her evidence with her whilst she was giving it. He also was allowed to make brief written submissions on her behalf.
63. Ramila's father died in 1973 when she was 24. She did not know, and had not met, her maternal cousins, being Subhash and his siblings, nor her maternal aunt, being Shantaben, whilst she was a child and the two families, living in Tabora, Tanzania and England respectively, communicated by post. Ramila's family appear to have been, in financial terms, modestly self-sufficient. During the 1970s and up to 1983 and her mother's tragic death, Ramila worked in the family business run by her mother. This was a small shop, later two small shops, selling garments and shoes. In the 10-year period between the death of her father and mother, the family started to build up a small trust fund in England to provide for those siblings, particularly Nilesh, who was living in England. Nilesh moved to England in 1973 and he encountered financial difficulties which these funds were intended to alleviate. This trust fund, which does not appear to have been formally created, was arranged by Jayaben with Shantaben and Kanji and was intended to provide a fund to be used to provide financial support for those of Jayaben's children and grandchildren who were based in England. It is likely that, prior to Kanji's death in 1985, the fund was administered by Kanji but Subhash had some involvement in this fund, certainly from about 1979 as is evident from the eloquent family letters written by Ramila and Vijaya to Subhash in 1979 which were put in evidence by Mukesh.
64. The relatively distant, formal but respectful relationship Ramila had with Subhash at that time, being a time before she had ever met her cousin and his wife and two children, can be seen from the contents of these letters. They all start: "Dear brother Subhash, Kiranbhabhi (sister-in-law), Rishi and Rupa". Addressing her cousin and his wife as brother and sister-in-law was a mark of respect. All the letters provided family news of life in Tanzania and all contained long passages expressing anxiety and worry about Nilesh's life in England coupled with information about the money that Ramila and her family were arranging to be transferred to Nilesh in small tranches from Tanzania to help him through his crisis. It is likely that the letter-writing stopped once Nilesh had sorted his life out. These letters show that the two families were friendly but not close and are largely concerned with pleas to Subhash to provide comfort and advice to Nilesh in what were clearly difficult personal times for him. There was no evidence that Subhash or his immediate family provided any financial support to Nilesh although they were clearly in regular contact with him.
65. The fund was created using an apparently legal method of circumventing the strict currency legislation in Tanzania which precluded hard currency being exported. Kanji would find from within the Gujarati community in England someone who wanted to provide payment in Tanzania of a sum similar in size to the sum Jayaben wanted to transfer to England. Jayaben would then arrange to pay that sum to the intended recipient in Tanzania whereupon, Kanji would collect the agreed Stirling equivalent in England and pay that into the account or trust fund being established for the Jayaben children. Ramila believed that about £3,000 to £4,000 per annum in this period was paid into the trust fund in this way. Given the relatively modest circumstances of the widowed Jayaben and those of her children still living with her in Tanzania, it is inconceivable that any larger transfers were made. Ramila was able to produce contemporary evidence of these payments contained in some of the letters written to England in this period by herself, Bhikhu and Vijaya to Subhash. These have otherwise unintelligible references to short and long-sleeved shirts contained within them. Ramila explained that this was family coded language for notification by the Tanzanian family of large or small transfers of funds into the Jayaben children's trust fund.
66. Ramila made two brief visits to England in 1981 and 1984. During the first, she met Subhash for the first time. The second visit was in 1984 when she again briefly met Subhash. These visits were, no doubt, primarily to attend family gatherings and to see Nilesh. Following Jayaben's death in 1983, the siblings still involved in running the shops found that it was not economic to continue with them and they closed them down in 1984. Ramila moved to India for a time and, whilst there she briefly met Subhash who was attending a religious festival also attended by other members of his and Ramila's immediate family. During their brief renewed acquaintance, he asked her to sign a general power of attorney in his favour which she did on 26 December 1985 before an executive magistrate in Jamnagar. Subhash explained that he needed this to assist him in looking after the Jayaben family money that he had received and Ramila, who had little knowledge of the size of the fund or as to how it was being administered, accepted this explanation and signed the document. Subhash's explanation would have had some credence since Kanji had died earlier in 1985 leaving him as head of the family and, by succession, trustee and administrator of the late Jayaben's fund and, following Jayaben's death in 1983, the ownership of this fund would have passed to all of Jayaben's children. During their time together in India, Subhash made no mention to Ramila of any other property or funds held by him or of any intention to place any property into her name.
67. Ramila moved to Portugal and lived there for a few months in 1986. She moved there in order to stay with her brother Bhikhu but a second tragedy hit her and her family when Bhikhu died in a swimming accident on 16 June 1986. Ramila met Subhash again in Portugal when he and Nilesh came from England for the funeral. Ramila does not recall meeting Mr Harjivan during that period but does recall that Subhash went to meet someone of that name. She stated in evidence that she had never met him.
68. Ramila then returned to Tanzania in 1987 and lived with her sister Varshanti and her husband helping in the house and in their shop. She married her husband Babu in Tanzania on 13 July 1990. Babu was a British citizen who was resident in England and Ramila moved to England with him in October 1990. Ramila first met many of the Thakrar family at her wedding reception held in England in January 1991 which was, of course, attended by Subhash. Ramila first lived in Wellingborough and worked in a chocolate factory earning about £3 per hour. Between April 1991 and May 1995 she and Babu lived on a temporary basis in Sidcup, Kent and, from May 1995 until the present they have lived in Mottingham, South East London in a house they bought for £54,995 which they bought with a mortgage of some £38,000 or less advanced by the Abbey National. In that period since 1990, Ramila has had infrequent meetings with Subhash and some of his siblings. She has more frequently, until the meetings were stopped by Subhash, had meetings with her aunt Shantaben who she is both close to and very fond of.
69. Vijaya's evidence. Vijaya has lived in Kisumu since her marriage in 1976. She has always live in modest circumstances and, indeed, she and her husband have struggled over the years since then to make ends meet. Vijaya has only travelled outside Kenya on four occasions in her life. The first such trip was many years ago to Uganda. Some years later she made two visits to England, in 1988 and 2001, and one to India in 2002 when her husband went there for heart surgery. During the first visit to Uganda, she met Subhash who was then unmarried and about to go to England for his professional studies. Vijaya's second visit outside Kenya in 1988, was to England for a 6-week holiday with her son, then aged 18 months, and her daughter, then aged 5. They stayed with Vijaya's brother Nilesh and he paid for their travel. During that visit, she met Subhash and Kiran when they invited her to dinner at their home and the following day, at Subhash's request, she attended his offices where he asked her to sign a general power of attorney in his name. Vijaya was perplexed by this unexpected request and asked why he wanted this. Subhash replied that he wanted it as a favour to him. Vijaya spoke with Nilesh by telephone and he said that it was alright to sign. Vijaya agreed, partly because she was very conscious of her relative financial weakness and because she regarded Subhash as the elder in the family. The document was signed in front of Mrs Barbara Harris in her office which is located close to Subhash's office and Subhash escorted her round there.
70. Vijaya had no further contact with Subhash until May 1994 when she received in the post an unsigned power of attorney form with her name typed in at the top and Subhash's name typed in as the person to whom she was granting the power of attorney. Subhash asked her, probably in a covering letter, to sign this document in front of a witness without giving her any explanation as to what the document was or why he was asking her to sign it. Vijaya took this document to a local lawyer who tried to explain to her what it was without much success. However, on learning that Subhash was both her maternal cousin and head of the family, the lawyer advised her to sign the document which she did. The lawyer witnessed her signature and she posted the signed document back to Subhash.

4.3 Prelude to Transfer of Portfolio into Ramila's Name

71. Prelude to SPC portfolio transfer into Ramila's name. The earliest use apparently made by Subhash of the power of attorney granted to him by Ramila that is evidenced in the documentation that is currently available was in August 1986. On 21 August 1986, Subhash sent Neil the original power of attorney that Ramila had executed in India on 26 December 1985 with a copy of the contract for 34 Burchell Road, London, in which she purportedly granted a long lease to a third Party. This property was the second to be transferred to Ramila, in May 1986, but that transfer, like many of the others, is now only evidenced informally in the notes and informal written exchanges between Subhash and Neil. This was, therefore, the first occasion that can now be traced on which Subhash purportedly acted on Ramila's behalf in a formal transaction in her name and as her agent.
72. According to Ramila when giving evidence, she was never spoken to or asked about any property transaction by Subhash, whether before or after this transaction. When Subhash needed formally to execute a document in her name, he held himself out as Ramila's attorney but the only power he held then was the one which he had sought and obtained from Ramila on the basis that he needed it to administer the Jayaben trust fund which Ramila and her mother had established and funded.
73. At trial no. 1, and as recorded in judgment no. 1, the refurbishment of all these properties was funded on a 50/50 basis by Subhash and Neil and the proceeds of sale were shared or accounted for on a 50/50 basis, albeit that the system of accounting was confined to entries in the relevant ledger cards in Neil's office. Subhash stated that Ramila provided funds for some of these developments but I found in judgment no. 1, and I confirm now having heard Ramila's evidence, that she provided no funds of any kind for any property purchase, development or refurbishment and she knew of no such action because she was never informed at any time that her name was being lent to a series of South London property dealings. I am able to confirm my finding of fact in judgment no. 1 that Subhash had no communication with Ramila about any of these properties and that all the relevant transactions were those of Subhash save for the name on the transfer.
74. There is no direct evidence available to explain why Subhash decided to use Ramila's name as the transferee of the SPC properties transferred to his appointed recipient by the joint venture. It is not known whether it is significant that the first such transfer related to the first of the SPC properties to be appropriated by the Neil/Subhash joint venture but it seems likely that that does have significance. The properties developed previously had come from William's estate and were each transferred into a different Thakrar family name: namely into Naina, Sheela, Mukesh, Kanji/ Shantaben, Vijay and Kishan's names. One was transferred into Vijaya's name, possibly because of Subhash's involvement in the Jayaben trust and the fact that, her brother, Nilesh was living in England and was known personally to him. Once his immediate family had each had one property notionally allocated to them, which coincided with the drying up of the William's estate properties, Subhash seems to have turned his mind to tax saving and asset preservation. His likely thinking was that he needed, for tax-saving and other purposes, an off-shore resident as his nominee owner of the SPC properties developed by the joint venture. This decision was probably taken in late 1985. Ramila's name was then chosen. In late 1985, Subhash would have known that he was about to meet Ramila in India. He had a ready excuse to persuade her to give him the power of attorney he needed to deal in her name, namely his involvement in the Jayaben trust fund. Moreover, he probably considered that she would never discover that her name had been used in this unorthodox way. Thus, Subhash appears to have decided to use her name and to have obtained her power of attorney in the forthcoming SPC development properties. That would explain why this power was executed in India on an English attorney form. He must have had typed up a blank power of attorney form before he left for India which he took to India with him for Ramila to sign.
75. Subhash's evidence at trial no. 1 about Ramila's involvement in property purchases. Subhash stated in evidence that the reason properties were first transferred into Ramila's name with the transfer of 23 Gurdon Road was because Ramila and her family were keen to increase their investments in the UK^[11]. During his evidence, Subhash distinguished between transfer and designation of properties and in fact considered that properties had been designated for Ramila^[12]. He spoke of Ramila expressing an interest in purchasing 34 Burchell Road. He was aware of this interest because he talked to her and Bhikhu at the time. Ramila's whole family were sending funds from Tanzania to Subhash's father and to Subhash with a view to investing them. These funds were put into various building society and bank accounts or lent to various Parties through Neil's firm. These sums were retained in this country. He consulted with Ramila and her family about these investments. However, Subhash felt free to deal with Ramila's family money indiscriminately^[13].
76. Subhash stated that he acted on the basis of the general power of attorney that Ramila had given him. This meant that he didn't have to speak with her about the dealings he was making in her name except generally in discussions with her. Ramila did write to him in Gujarati letters containing family matters but he didn't keep these letters. However, he kept no records of his dealings with Ramila's money or of the properties he acquired on her behalf^[14]. Subhash submitted tax returns for her but no copies were any longer available. However, no capital gain was declared on Ramila's properties because she was resident overseas^[15].

4.4 Jagani

77. Subhash also explained how five properties allocated to Jagani came to be acquired by Ramila. According to Subhash^[16], Jagani purchased five properties from Neil. These properties were 20 & 26 Ruthin Road, 40 Springfield Road, 22 Waldegrave Road and 38 Rosenthal Road. Subhash stated that these properties were sold towards the end of 1986 to Ramila's and Vijaya's family in a sale undertaken in East Africa. Ramila's and Vijaya's family, using Ramila's assets, allegedly paid Jagani in East Africa for his interest in these properties. In his evidence at the first trial Subhash had sought to portray Ramila as coming from a wealthy family residing in Tanzania with business interests in the United Kingdom which she sold off in 2000^[17].
78. The only evidence that Jagani existed as a separate individual came from Subhash. No other witness appeared to know him. According to Subhash, he was a business associate of Subhash's brother-in-law and known to Subhash and he knew Ramila's family in East Africa. He bought these properties as an investment. He fell out with Neil and, as a result, he sold, or as Subhash put it, assigned his five properties to Ramila by means of an oral assignment to her in about 1987. He was paid by Ramila's family in East Africa^[18]. Ramila told him of this assignment but never produced any written evidence of it.
79. Jagani, according to Subhash, did produce written evidence of the assignment, provided in a written authority addressed to Neil in the form of a short letter which merely confirmed his verbal instructions to Neil to deal with the properties in his name in any manner as directed by Subhash. Subhash produced a photocopy of an unsigned copy of this letter but there was no means of knowing whether this photocopy of an unsigned copy of what purports to be a letter that Subhash produced at trial no. 1 was genuine or, like so many copies of documents that were found on Subhash's hard drive in 2005, had been replicated by Subhash to make it appear that it had come from someone else, in this case from Jagani. There was no other evidence that corroborated Subhash's evidence that this was a copy of a genuine letter written by his brother-in-law's business partner to Neil. All that is known is that these properties ended up registered, some in either Ramila or Vijaya's names and, more recently, they were registered into Glen's name.
80. At trial no. 1, the court did not hear from Ramila who was said by Subhash still to be resident in Tanzania. In fact, she was living in Mottingham, London, SE9. All these transactions were raised with her in her evidence at this trial. Had her presence in England been known about by Groups 2 and 4, the adverse findings about Subhash made at that trial would have been even more devastating to him. It is perfectly clear now, having heard both Ramila and Vijaya's evidence, that Subhash never discussed anything about any of these properties with either sister, never received any money from either to help pay for or fund the acquisition and refurbishment of any of these properties, never accounted to them and never transferred into their possession nor held to their order any proceeds of sale. Neither Ramila nor Vijaya had ever heard about these properties until a solicitor took their respective proofs of evidence prior to the fact-finding trial^[19].
81. Thus, Ramila in one concise moment, demonstrated her outrage at Subhash's fabrication:

"If I was wealthy, then – these people in large cars and large houses, [the Thakrar family], roam around in Rolls Royce and Mercedes and in large houses with large cars. If I were wealthy I would have been like them, living in larger houses and larger cars. I have a terraced house and the car which I have is not like that of a wealthy person."^[20]

82. I accept Ramila and Vijaya's evidence. It was clear that neither of them had the means to purchase these properties in the first place, given that their combined value at the time when Jagani allegedly sold them to their family (it was not clear to whom these sales were allegedly made) was approximately £500,000. Moreover, given their modest financial circumstances, it is equally clear that Ramila and Vijaya, either collectively or individually, did not receive by way of payment a sum of that size from the proceeds of any subsequent sale of these properties.
83. I also find that the purported copy of an unsigned letter adduced into evidence by Subhash at trial no. 1 to support his own evidence that Jagani both existed and assigned the Jagani properties to Ramila and Vijaya's family for consideration is a fake concocted by Subhash at some time long after the purported assignment. His clearly demonstrated lies about the Jagani saga support my finding that Ramila and Vijaya's evidence is to be accepted.
84. Jagani properties - conclusion. There is therefore, no evidence, other than Subhash's discredited evidence given at the first trial, that Jagani ever existed or that properties registered in his name were ever sold by him to Ramila and Vijaya or that money passed from their families to this third Party or that the properties were subsequently sold by them and proceeds of sale received by them. Subhash's lies about this matter support the conclusion that the Jagani episode never took place. Instead, Subhash used Jagani's name, or merely used that name, as a vehicle for the hiding of his real ownership of properties that had been dishonestly acquired by Neil and himself from SPC or William's Estate. There is, therefore, no difference between the Jagani properties and those registered in Ramila's name.
85. Subhash's use of the Jagani properties, firstly in registering them in that name whilst retaining control and beneficial ownership of them and secondly by using the proceeds of sale of at least some of these properties for his own purposes provides a good illustration of how Subhash used the Ramila properties throughout the history of this saga as though beneficially owned by himself. This was the case, irrespective of whose name these properties were registered in, charged to or, in the case shares in Glen, who was the registered proprietor.
86. This is, therefore, a good example of the many instances in which Subhash can be seen to have acted on the basis that he regarded himself as beneficially owning the properties that he had arranged to be placed into the names of others.
87. Subhash's use of the proceeds of sale of properties held in the name of Ramila or Jagani. Subhash treated the properties that had been transferred into the names of others on his instructions as if he owned them. Thus, he used the proceeds of sale of the properties held in the name of Ramila and Jagani for his own purposes. In his evidence at the first trial, Subhash alleged that the sum of £135,000 required to fund the balance of the purchase price for Unit 8 Waterside Court in March 1989 came from the joint funds which he thought Neil was holding for our benefit from their previous ventures^[21]. In fact, the purchase price came from the proceeds of sale of 3 Mansfield Road (£75,000 in November 1988), 46 Fairthorne Road (£30,000 in December 1988) and 22 Waldegrave Road (£59,000 in February 1989). All three properties were originally owned by SPC and, at the dates of their respective sales, the first two were held in the name of Ramila and the third in the name of Jagani. Subhash could not have legitimately used these proceeds of sale in this way had these three properties been beneficially owned by Ramila or Jagani.

4.5 Powers of Attorney

88. Ramila and Vijaya's powers of attorney. Subhash used the powers of attorney he had obtained from his two cousins for purposes outside the limited authority that he had been given^[22]. He had obtained these powers of attorney from each of them having misrepresented to each that they were needed for limited purposes connected with the Jayaben family trust set up with limited funds to help pay living and educational expenses for Ramila's family in England. As between Subhash and each cousin, he only had authority to use these powers of attorney for those limited purposes. Instead, he used them to involve their names in property transactions for the sole purpose that, because they were resident overseas, if the properties were registered in their names, he could avoid paying tax on the earnings and capital gains otherwise payable on these properties.
89. However, Subhash always intended to keep control of these properties, never intended to account to Ramila and Vijaya for them and always intended to retain the beneficial ownership of these properties and their proceeds of sale. The properties had been dishonestly obtained by Subhash. He knew that they had been taken from SPC by Neil without SPC's authority and without reimbursement and that they had then been used by the joint venture as if Neil and he owned them. The joint venture, that is Neil and Subhash, agreed that these properties would be transferred by Neil, in his solicitor's role, into Ramila or Vijaya's names and that the two men would share the net proceeds of sale arising from any subsequent sale or grant of long leases. Subhash would, in effect, "warehouse" these properties in an off shore resident's name and, for that purpose, he had dishonestly obtained general powers of attorney from both sisters, Ramila in December 1985 and Vijaya in September 1988.
90. Equally, the properties initially transferred to Jagani were never intended to be sold to a third Party and Jagani, if he existed, was merely a name borrowed by Subhash who apparently was resident overseas. The "assignment" of these properties by Jagani to Ramila in Tanzania never took place, Ramila has never heard of anyone called Jagani. This was an invention of Subhash in order to explain why the documents showed that properties had been allocated to a Jagani which ended up in Ramila and Vijaya's names. It is significant that, according to Subhash, the rift leading to the assignment to Ramila and the instructions given by Jagani to Neil to deal with the properties as Subhash instructed appear to have occurred in about March 1986, some two to three months after Subhash returned from India with Ramila's power of attorney^[23]. This coincidence suggests that Subhash was seeking to "regularise" the transfer of properties by ensuring that they were transferred into the name of an existing off-shore resident rather than into the name of a fictitious off shore resident or one whose power of attorney he did not hold^[24]. At all events, Ramila was never consulted by Subhash about these properties, has never known anyone called Jagani and never took an assignment of properties from, nor paid anything for, properties in South London from anyone whilst living in Tanzania in the 1980s.

4.6 Transfer of properties into Ramila's and Vijaya's names

91. I have already decided in judgment no. 1 that was given following trial no. 1 that the transfer of properties into the names of family members other than Ramila and Vijaya were as nominees and that the proceeds of sale and any rents and profits earned from the properties following transfer were beneficially owned by Subhash and Neil. These findings are applicable to Ramila and Vijaya's properties but the findings in relation to both the William's estate's properties transferred into family members' names and SPC properties transferred into Ramila's name. The evidence of all family members is only consistent with their being nominees in relation to the property registered in their name. In Ramila's case, she had no knowledge at all of the use of her name and the conclusion as to her is even stronger that she was a nominee owner. Clearly, Subhash did not intend any of the registered proprietors to recover any proceeds of sale or rent from their properties and the only basis for his having arranged for the various family actions to be started can have been that he wanted to recover for himself, in his family members' names, the proceeds of sale from Neil's estate.
92. These findings are now re-affirmed by a weight of further evidence that was neither available nor adduced at trial no. 1. The principal sources of such evidence are the written and oral evidence of Ramila and Vijaya. The totality of their evidence I accept since they were both palpably honest witnesses, their evidence was mutually corroborative and was consistent with all the other non-partisan evidence and it was also inherently true. It is worth setting out a few passages from the evidence of both Ramila and Vijaya so as to obtain something of the flavour of their vehement and angry denials of Subhash's repeated suggestions in contemporary documents that everything done in their names was done for them as beneficial owners of the property or shares in question and for their benefit.
93. Ramila stated that she had never received a copy of the agreement to transfer the ex-SPC properties to Glen, and in fact had never seen it prior to being shown a copy in the witness box. Her evidence was trenchant:

"There is no question about me remembering because I was not involved in this and I do not know about this and this topic never came up. Because Subhash has signed here as my attorney, you can now see very clearly that he has misused my power of attorney.^[25]"

94. Ramila also stated that she did not receive any part of the stated purchase price of £1 million:

"I have not received a single penny but they should prove to the Judge - the honourable Judge that whether, if they have paid, then which account it has come from, which account it has gone to, they must prove that.^[26]"

95. She also stated that she did not receive any money from her sister Vijaya for any shares in Glen. Again her evidence was trenchant:

"A. There is no question about it because you have seen in the video link whether my sister

Vijaya has any money or not; millions of pounds! And it was very clear.

Q. You did not receive half a million pounds from Vijaya for the shares in Glen?

A. Forget half a million. I did not get a single penny. So there is no question about half a

million.^[27]"

96. Vijaya stated that she had no recollection of (a) being issued with any shares in Glen (b) acquiring any shares in Glen (c) paying any monies for shares in Glen or (d) paying to Ramila just under £½ million on or about 30 March 1990 and a further sum of similar amount in November 1990 (or any sums of such amounts at any time)^[28].
97. It was also corroborated by the plain untruths that Subhash repeatedly stated in giving oral evidence at trial no. 1. In particular, he held Ramila out to be a wealthy woman who had provided him with a general power of attorney to invest substantial sums, being part of that wealth which she had remitted to him, in property in England. Ramila still lived in Tanzania in 2003 in the period he was giving evidence, according to his evidence, and she was aware of the nature and extent of the investments that had been obtained on her behalf. These investments had been put into an off shore company, Glen, for tax purposes and that company had subsequently been sold to a third Party unknown to Subhash for a very substantial sum which had been paid to Ramila.
98. None of that evidence is true, as is clear from the summary of my findings already set out. The question arises as to why Subhash went out of his way to lie so comprehensively about Ramila, and also about Vijaya, where his lies are similarly untrue. It cannot be said that Subhash might have been mistaken about Ramila's wealth and where she was living. He had a detailed knowledge of her family circumstances from his mother Shantaben, from Nilesh, from the letters from and the brief contacts with Ramila, from his dealings with the Jayaben trust and from his role as head of the extended Thakrar family. It follows that his evidence was deliberately dishonest and that he must have invented it for a purpose. The obvious purpose was that he invented these lies as a means of covering up that he had placed the properties that he had acquired dishonestly in Ramila and Vijaya's names as nominees so as to cover up his dishonesty and so as to obtain significant tax relief that would not be available had the properties been placed in his name. These transactions could only have appeared to be bona fide if Ramila was wealthy, had provided him with a power of attorney to act as her investment manager of that considerable wealth, had bought the properties with her own resources, had been accounted to for them by Subhash and was still living abroad.
99. Subhash had propagated the lies about his cousins for some years before the original trial so as to preserve the fiction that he had no interest in the properties or in Glen that was set up as a vehicle to hold them. Thus, Subhash had no option but to maintain this fiction at the first trial if he was to have any prospect of defending SPC's claims. This could only be done if he also maintained the lies about his cousins. Thus, Subhash appears to have taken a gamble, which succeeded during the first trial, that it would not be discovered by Parties 2 and 4 that Ramila was in fact living in England. This was a considerable gamble since, if anyone spoke to Ramila, Subhash's lies about the properties and his cousins would have been discovered. Had this occurred, Subhash's case and the cases of his siblings at the original trial would have been destroyed.

4.7 Decision to transfer the SPC portfolio into Ramila's name

4.7.1 Factual background

100. The joint venture continued satisfactorily, from Subhash's point of view, from 1983 until late 1987 with twelve properties being transferred into Ramila's name. At that point, SPC's crisis broke. This arose from the Inland Revenue's winding up petition due to repeated and wilful failures by Neil to submit tax returns. This crisis created the opportunity for Subhash dishonestly to acquire from SPC, with Neil's agreement, SPC's remaining property portfolio at an excessive undervalue, little of which was actually received by SPC and none of which was paid for or provided by Ramila herself as opposed to by Subhash using funds distributed to him from the joint venture account that he had then arranged to have been put in her name. The series of acts of dishonesty culminating in the transfer of that portfolio into Ramila's name is the subject of a series of findings in judgment no. 1^[29].
101. This is a summary of the relevant findings of fact taken from judgment no. 1 which have not been challenged since:

(1) By a transfer dated 25 March 1988 and registered on 12 April 1988, SPC transferred to Ramila's name the entirety of its remaining property portfolio comprising 71 different addresses for £980,000.

(2) Subhash agreed with Neil to defraud both SPC and Kenneth. Kenneth was the director Neil always use to sign any SPC documents that required the signature of a director but he was otherwise kept in the dark about SPC's transactions and business. The fraud was, on Subhash's part, one to procure the sale of SPC's property portfolio to Ramila at an undervalue and to procure that a significant part of the purchase consideration was unpaid and written off. Neil was not aware that Subhash's suggested valuation of the properties was in fact a significant undervalue of the portfolio. He was concerned to be rid of SPC's portfolio. He wanted to be rid of SPC and its portfolio because of his mismanagement of SPC's affairs, his dishonest misuse of SPC's other properties, his dishonesty vis-à-vis his siblings, his belief, which Subhash has dishonestly given him, that there was no possibility of obtaining more for the portfolio because only Subhash could procure the funds needed to extricate the portfolio from the hands of the Revenue, and his declining health and weariness which had left him disinterested in SPC and its troubled affairs. Kenneth was not a Party to Subhash and Neil's fraud, he was merely misled into signing the necessary contract to give effect to the sale of SPC's portfolio.

(3) Part of the consideration that was paid, being a sum of £122,827.79, was drawn from Ramila's accounts representing savings of Ramila and her family. They were monies held in her name in two separate building society accounts and another account which Subhash had opened^[30]. Further sums, totalling £179,340.00 were also paid towards this consideration out of joint account monies received for the sale of properties in Ramila's name. Ramila provided no part of any of the sums totalling £179,340 and was unaware of their existence or of their use.^[31]

(4) A further sum of £110,000 was paid from portfolio funds collected following the transfer of the portfolio into Ramila's name. These funds were made up of rents and other profits earned from the properties and were held in an account that was both opened in Ramila's name and operated by Subhash and a small sum was still held in Neil's joint venture account. They were paid over to a creditor of SPC in order to discharge SPC's liability to that creditor on the instructions of Subhash and, again, Ramila was unaware of their existence or use^[32].

(5) No other part of the consideration was paid to SPC^[33].

(6) Thus, Ramila never herself knowingly provided or approved of any payment towards, or set of any indebtedness against, any part of the consideration for this portfolio.

(7) No rents, profits or other recoveries relating to any property in this portfolio were ever accounted for to Ramila and she has never received any payment of any such profits or other recoveries.

102. The decision to use Ramila's name for the acquisition of the portfolio was taken by Subhash at or soon after the meeting held in Neil's house on 11 November 1987, being the meeting at which the decision was taken by Neil and Subhash that Subhash would acquire the SPC portfolio at a serious undervalue. Subhash's evidence about this decision at trial no. 1 was that Neil, out of the blue, asked him whether he knew of anyone who would buy the portfolio for £1m, a price which Subhash knew was a serious undervalue. His evidence at trial no. 1 was then as follows:

"Q. … you say that Neil and Kenneth asked you if you knew of anyone who might be interested in purchasing SPC's property portfolio and you immediately indicate that Ramila might be interested?

A. No, I did not immediately indicate Ramila, I had indicated other sources who I did approach on Thursday 12^th November … I had also been in touch … on, I think it was Friday, with various Parties also to see whether anybody could be found and then Terry [bank manager] had agreed to lend the money [needed to pay off the Inland Revenue] so obviously that point was communicated to Neil and he and Kenneth then agreed to sell the properties to Ramila …".

103. Subhash stated that Ramila did not have the resources to pay for the portfolio in full up front but would make deferred payments after completion from development profits of some of the houses within the portfolio^[34].
104. It is clear that Subhash used Ramila's name to enable him to capitalise on this dishonest opportunity to acquire a large property portfolio at a significant undervalue so as to be able to "warehouse" this portfolio using an apparently off shore owner in exactly the same way as he had used Ramila and Vijaya's names for similar purposes. The only difference was that this, by far the largest acquisition, was one which had been undertaken by Subhash alone and not by the joint venture and that Subhash was cheating not only SPC but also Neil and Kenneth.

4.7.2 The legal status of the properties held in Ramila and Vijaya's names

105. All the properties were registered in Ramila or Vijaya's name by Subhash using the general powers of attorney he held from them. However, Ramila and Vijaya were never intended by Subhash to acquire the beneficial ownership or any interest in any of these properties or their proceeds of sale, neither of them provided any consideration for the acquisition of any of them, were ever consulted by Subhash as to their acquisition, the funding of that acquisition or any decision as to their management or disposal and were never informed of the fact that they had been acquired in their name.
106. If Subhash was genuinely acting as Ramila or Vijaya's attorney when arranging for the registration of each property in their respective names, he had a duty to account to them for each acquisition. Thus, if he had been acting bona fide under the general powers of attorney he held, Subhash should have informed Ramila and Vijaya of each property acquisition into their respective names as soon as this occurred and provided them with full details on a regular basis thereafter of all outgoings and income attributable to each property. The absence of any information being provided at any time in relation to any property is very good evidence that Subhash was not arranging for these properties or any income or capital derived from them to be owned beneficially by them but was only arranging for the respective properties' registration in their name as nominees for an ulterior purpose of his own.
107. An unauthorised act taken by an agent, such as the unauthorised acquisition of a property in the principal's name, does not bind the principal unless and until the principal subsequently ratifies that act. Ratification of an unauthorised act cannot occur until the principal gets to hear of the act and is able to take a conscious decision to ratify the act of acquisition. Thus, the registration of these properties into Ramila and Vijaya's names did not have the effect of passing beneficial ownership of the properties to them. They could have acquired beneficial ownership if they had ratified the transaction since, on ordinary principles of agency, a principal may always ratify an unauthorised act taken in his or her name and thus take both the benefit and the burden of the unauthorised transaction. Unsurprisingly, given their complete lack of knowledge of anything relating to any of the relevant acquisitions, Ramila and Vijaya did not ratify, nor have the opportunity to consider ratifying, any registration or transfer of any property into their names.
108. Subhash did not, at any stage, account to Ramila or Vijaya and he never intended to. Thus, in the period between the registration of any property in Ramila or Vijaya's name and the transfer of that property to Glen, Ramila and Vijaya cannot be regarded as holding anything more than the bare legal title of each property. The beneficial ownership of, and any proceeds of sale arising from, each property would have been beneficially owned by Subhash, albeit subject to SPC's overriding interest and tracing rights. This is the inevitable consequence of the fraudulent circumstances in which Subhash had caused all the properties to be transferred away from William's estate or from SPC to either Ramila or Vijaya in the first place. One way of testing this conclusion is to ask what would have happened had Ramila or Vijaya unhappily died after a property had been registered in their name. In such circumstances, any claim by their estate for the beneficial interest of that property would have been met by Subhash's contention that the beneficial interest in the property was held by him on behalf of the entire Thakrar family whose interests he was managing and whose assets he was owning and controlling through the nominee ownership of Ramila or Vijaya.

4.7.3 Conveyancing chain of Ramila's and Vijaya's properties

109. The chain of contracts and registrations that led to the freeholds of the properties outside the portfolio that were transferred into Glen's name and of the granting of long leases to third Parties cannot be fully documented. This is for three reasons. Firstly, only the most rudimentary conveyancing was undertaken prior to the transfer of freeholds into Ramila or Vijaya's name, secondly, many of the relevant documents were never retrieved from SKT's premises where all the relevant documents were stored and, thirdly, a full search of the Land Registry for each property registered in Glen's name has not yet been undertaken.
110. In relation to the properties transferred into Glen's name that had been transferred initially to Ramila or another family member outside the portfolio sale, all that occurred was an informal allocation of the property to the family member that Subhash had decided would be the nominee freehold owner followed by a re-registration of that property in the name of that individual, usually only as a prelude to the grant of a long lease to a third Party. The consideration was stated to be a relatively nominal sum, for the William's estate properties this was £10,000. There is no evidence that any consideration changed hands for any of these properties. A contract for sale was executed and the change of ownership from William's estate or SPC registered at the time of the grant of a long lease to a third Party. The transfer to Glen was, for some of these properties, included in the schedule of portfolio properties contained in the contract for sale of these properties but, for the rest, no formal registration of Glen's ownership appears to have occurred until 2000 when Mr Harjivan allegedly became the owner of all of Glen's shares by way of transfer from Ramila and Vijaya. The portfolio properties were sold to Ramila by a contract dated 17 November 1987 that sale was completed by a transfer dated 25 March 1988. A further contract for the sale of the properties by Ramila to Glen was executed dated 30 March 1990 and the properties were then subsequently re-registered in Glen's name.
111. There is a suggestion in the contemporary documents that Ramila executed a further general power of attorney in favour of Subhash dated 15 March 1990. This document has not emerged either as an original or as a copy but it is conceivable that Subhash manufactured one immediately prior to the formal transfer of properties from SPC's portfolio from Ramila's into Glen's name. It is inconceivable that Ramila could have signed such a power of attorney, she was living in Tanzania in March 1990 and was soon to marry Babu. Subhash did not travel to Tanzania and there is no evidence of a blank power of attorney form being sent from England to Tanzania. However, a forged or manufactured power of attorney may well have been used to support the transactions dated 30 March 1990, in which case Subhash's signature supported by that invalid power of attorney is itself invalid on that ground alone. However, the evidence was not sufficient to enable a finding to be made that Subhash had manufactured a power of attorney dated 15 March 1990 or that such a document had been used as the purported authority for Subhash to act on Ramila's behalf on any occasion.

5 Why was Glen Formed and who Beneficially Owned its Shares after its Formation?

5.1 Glen's formation

112. The conveyancing required to ensure that the portfolio properties were re-registered in Ramila's name was undertaken by a new firm of solicitors, Mr Roger Smith of Claremont Haynes & Co, instructed by Subhash. Soon after the re-registration had been effected, that firm was evidently advised by accountants it used that properties registered in the name of off-shore residents could be subject to inheritance tax if the registered proprietor died and that it was preferable for such properties to be held by an off-shore company owned by the off-shore resident. This advice was confirmed in a letter written by the solicitor concerned to registration agents based in Jersey on 31 May 1989 which reads in part:

"We acted last year on behalf of a client (Miss Ramila L. Thakrar) who I understand is domiciled in Tanzania and who acquired a number of tenanted residential properties in England. Under the transaction £100,000 was paid on completion and the balance of the purchase price is payable by three annual instalments, the first such instalment being due on 25^th March 1989.

In order to avoid the payment of Inheritance Tax in England should our client die, her accountants have proposed that she should arrange for the formation of a company in Jersey and that she should agree to sell the properties in England to that Company in return for shares to be allotted to her in the Jersey company. She would then make a declaration of trust that she holds the properties in trust for the Jersey company.

The accountants in question (Messrs. S.K. Thakrar & Co) … have instructed us to contact you to enquire whether you are able to assist both in relation to the registration of an appropriate company in Jersey and its subsequent administration …".

113. On seeing a copy of this letter, Subhash wrote to the solicitor stating that the contents of this letter were correct and that:

"I have cleared this matter with my client over the telephone".

This was a lie because Subhash never discussed Glen, its formation, the property holdings in Ramila's name or anything else concerned with these properties with Ramila over the telephone or by any other means. The letter did, however, state that Vijaya was also to be a shareholder in the company that was to be acquired in Jersey.

114. On the advice of the formation agents, a Liberian company was formed since this was marginally cheaper than buying or forming a Jersey company. This company was to be administered in Jersey with a full package of directors, secretary, registered office, shareholders and the minimum services to maintain the company by the formation agents. The property management would be undertaken by Subhash and his firm in London. The consequence was that Glen was incorporated on 22 June 1989. Its directors and officers were all based off-shore. On 17 April 1990, 250 shares were allotted to Ramila and to Vijaya and Glen issued share certificates to give effect to this allotment. On 30 March 1990, the SPC portfolio and other properties all registered at that time in Ramila's name were sold to Glen for a consideration of £1m. The agreement was signed on behalf of Ramila by Subhash and the properties were re-registered in Glen's name. Later in the year, Subhash arranged for 249 of Ramila's 250 shares in Glen to be re-registered in Vijaya's name and the Glen share register records that fresh share certificates were issued to give effect to this transfer. There is no evidence as to the reason for this transfer nor that any purported consideration was paid by Vijaya to Ramila for the acquisition of one half of the shares which would have had, even in 1990 soon after its formation, a substantial value. As with all the other transactions associated with Glen and the properties transferred into its name, this transaction was not discussed with or mentioned to either Ramila or Vijaya.
115. It is pertinent to set out evidence given by Subhash at trial no. 1 about Glen's formation and the sale by Ramila to Glen for £1m and the transfer into Glen's name of the properties held in her name. Subhash said:

"Q. Are you able to point to the individual or individuals who received that advice and then said: yes, please follow that advice and set the company up?

A Yes sir, First [the solicitor who carried out the conveyancing into Ramila's name] raised [the advice to transfer the properties into an off-shore company] after I think he had been to Jersey for some conference or advice. Then he communicated that to me saying: Subhash, this is a good idea. In the case of Ramila or, you know, is she going to die, then you have a problem. So I said: fair enough so I did communicate that advice to Ramila and her siblings and that was then communicated back saying: yes, you should form the company quickly.

Q. How did you communicate to Ramila: by telephone or writing?

A. Normally we used to do it by telephone, because in writing it was rather dangerous.

Q. Did she give you instructions to set up the company in writing?

A. No, by telephone. …

Q. And it is said that the consideration was £1 million was paid to Ramila?

A. That is correct, and the shares as well.

Q. Do you know whether the £1 million was paid to Ramila?

A. Over the period, monies were certainly drawn by them and then – I do not have much other details.

Q. Were you involved in arranging for the payments from Glen to Ramila?

A. No, but the directors were certainly making some payments to her.

Q. How do you know that?

A. Because I used to do the accounts initially.

Q. Do you know what happened to the properties after they were transferred to Glen?

A. All I know is that Glen has been sold by the family in the year 2000.

Q. Do you know who to?

A. To some people in – Portuguese people in Mozambique as far as I know.

Q. I see, do you know in whose name the properties are now registered?

A. In Glen's name, as I recall.

Q. Still registered in Glen's name?

A. As far as I know.

Q. You said "they were", which date?

A. I think, when – last year, when the solicitors were talking to Ramila and me they were in Glen's name.^[35]"

116. In considering Subhash's underlying reason for setting up Glen and for arranging for the transfer of the properties in Ramila and Vijaya's name to Glen for a purported consideration it is pertinent to consider two significant events that occurred in 1990 in Ramila's life. The first was her engagement and subsequent marriage to her husband Babu who was then and remains a British national resident in the United Kingdom. The marriage took place in Tanzania on 13 July 1990. Following her marriage, in October 1990, Ramila moved to England with her husband and set up home in Wellingborough, near Ramila's brother Nilesh. A large family wedding reception was held in England in January 1991. The entire Thakrar family living in England attended this reception including Subhash, Shantaben, Kiran, Mukesh, Vijay, Sheela, Naina and Kishan.
117. For a time after her marriage, Ramila took a job in a chocolate factory in Wellingborough and then in a packaging factory in Whitworth at a wage at about £3 per hour. Babu was also employed, as a fork lift truck driver. Ramila and Babu moved to Sidcup in 1993 and, in 1995, they bought a former council house in Mottingham for £54,995 with a mortgage for some £38,000 or less secured on the house and funded out of Babu's relatively modest earnings. The mortgage was arranged by Vijay at Subhash's suggestion.
118. At no time did Subhash raise or discuss with Ramila the properties in her name, the formation of Glen, the issuing of shares in Glen in her name, the liabilities arising from her property ownership or the money coming to her for the sale of her properties to Glen.

5.2 Subhash's reasons for Glen's formation and shareholding

119. On 30 November 1990, 249 of the block of 250 shares held in Ramila's name were transferred to Vijaya so that Vijaya was registered as holding 499 of the 500 issued shares. This transfer, like the earlier transfers, was recorded in Glen's share register and share certificates were issued to formalise this re-registration.
120. In chronological order, the relevant events relating to Glen's formation were as follows:

(1) 26 December 1985. Ramila gives Subhash a power of attorney in India at Subhash's request.

(2) 11 November 1987. Subhash agrees with Neil to acquire SPC's portfolio on behalf of Ramila for £1m. This acquisition was procured by fraud on both Neil and Kenneth.

(3) 17 November 1987. Instructions were given by Subhash to Mr Smith of Claremont Haynes & Co to act for Ramila and arrange for the transfer and conveyance of the SPC portfolio into Ramila's name. Mr Smith was informed by Subhash that he held a general power of attorney to act on behalf of Ramila and that Subhash's interest in the transactions was merely as Ramila's financial adviser and accountant and that it was in that capacity that he held her power of attorney. Subhash also informed Mr Smith that Ramila was a wealthy Tanzanian resident, who was non-resident in the United Kingdom and was both domiciled and resident in Tanzania. The portfolio acquisition was being acquired for investment purposes.

(4) 25 March 1988. Transfer between SPC and Ramila for the completion of the sale and acquisition of SPC's remaining portfolio. The respective parts of the Transfer were executed by Kenneth and Neil on behalf of SPC and by Subhash on behalf of Ramila. Ramila's address, whose address was given as c/o 750 Sidcup Road, Eltham, London, SE9, which was Nilesh's address.

(5) 2 September 1988. Subhash obtains a signed power of attorney from Vijaya during her short visit to England. This signature was sought: "as a favour to me".

(6) 31 May 1989. Claremont Haynes's advice to Subhash that an off-shore company should be formed by Ramila to hold her properties. Ramila should sell the properties to the company and be allotted the shares in the company in part consideration for this sale.

(7) 30 March 1990. The properties were then sold by Ramila to Glen for £1m by a contract dated 30 March 1990 that was signed by Subhash on Ramila's behalf and were subsequently re-registered in Glen's name.

(8) 17 April 1990. 250 shares were allotted to Ramila and to Vijaya and Glen issued share certificates to give effect to this allotment.

(9) 13 July 1990. Ramila married Babu in Tanzania.

(10) October 1990. Ramila moved to England.

(11) 30 November 1990. 249 of the 250 shares in Glen that were registered in Ramila's name were re-registered in Vijaya's name and new share certificates were issued by Glen. No consideration was identified or paid for this transfer.

121. The only conclusion that can be reached as to the reason for the formation of Glen and for the arrangements for its shareholding are that Subhash decided to register all properties he was acquiring from the partnership arrangement with Neil in the name of someone resident overseas for tax reasons and to hide the connection between him and these properties which had all been acquired dishonestly from SPC. He still wished to retain control over these properties and regarded himself as the beneficial owner of them. When the opportunity unexpectedly arose for him dishonestly to acquire SPC's remaining portfolio, he again arranged for those properties to be transferred into Ramila's name for the same reasons as he had arranged for the earlier transfers into her name.
122. Soon afterwards, he was advised of the desirability of setting up an off-shore company for inheritance tax purposes by the solicitors who had acted for Ramila, as they thought, in the portfolio transfer. The advice was given on the basis that the transfer was a bona fide transfer to a wealthy individual resident overseas. Although that was a reasonable view of the arrangement, it was not the correct view as a result of Subhash's dishonesty. However, the advice must have set Subhash thinking as to whether the then arrangements were satisfactory from his point of view. He was making returns to the Revenue on the basis that the properties were held by an overseas resident so that, if Ramila died, they would pass to her estate and inheritance tax would be payable. Subhash would then lose control of these properties. He therefore appears to have adopted the advice given, albeit to further his own dishonest scheme. Glen was set up and the shares registered equally in Ramila and Vijaya's names. The properties were then transferred to Glen. Soon afterwards, Ramila married and then moved to England and, as a result, Subhash hastily arranged for all but one of Ramila's shares to be transferred to Vijaya. This was to enable him to retain control of Glen and the properties registered in its name of which he regarded himself as the beneficial owner.

5.3 Beneficial ownership of Glen's shares

123. The background to the formation of Glen, Subhash's misuse of Ramila and Vijaya's powers of attorney, the failure to inform either of them of any of the transactions undertaken in their names and the use of their names as nominees to transfer the properties away from SPC all point to the conclusion that Glen's shares were registered in Ramila and Vijaya's names as nominees. In summary, Glen was set up in order to strengthen the complete control that Subhash intended to retain over the properties. He was therefore putting up a further screen behind which he was hiding his beneficial ownership of Glen. He did not attempt to arrange for the consideration due to Ramila from SPC for selling it the properties registered in her name to be paid to her nor did he arrange for the consideration that should have been paid to her by Vijaya for the sale to Vijaya of 249 of these shares to be paid over. Indeed, he treated these shares as his own since no consideration was apparently considered or provided for. Only Subhash could have procured this transfer since the Board of Glen only undertook such activities and entered into such transactions as Subhash instructed. However, this conclusion is merely provisional until the way in which Glen was managed, directed and controlled and the way in which its assets were used after it was formed are examined.

5.4 Evidence of Glen's management 1990 – 1995

124. Glen was incorporated in Liberia and its initial share was issued to S.B. Goweh whose address was given in the Articles of Incorporation as being a Post Office address in Monrovia, Liberia. This share was transferred to R.J.E. Managers Ltd and a second share was issued to S.T.R. Managers Ltd who were management companies based in Jersey who were appointed by Strachans, a Jersey-based provider of company management services and related professional services. Strachans had been appointed by Subhash to arrange the incorporation of Glen and to provide management services and a registered office for Glen in Jersey. Three directors were appointed by Strachans, two being management companies based in Jersey. The chairman was a Strachans director who was also a director of Glen. These directors, through their respective representatives, authorised the transfer of the two issued shares to Ramila and the allotment of a further 248 shares to Ramila and 250 shares to Vijaya. SKT, being Subhash's accountancy firm that was located at Thakrar House, 113, Woolwich High Street, Woolwich, London, SE18 6DN, were appointed Glen's accountants.
125. From the start, the management of Glen was undertaken by Subhash from Thakrar House. However, the annual accounts, prepared by SKT under Subhash's direction, made it clear that Glen controlled its activities outside the United Kingdom and did not maintain any branch offices in the United Kingdom. Despite those assertions, the management of the properties registered in Glen's name was undertaken by SKT and all paperwork relating to the company's day to day activities was kept at Thakrar House. The company did not employ any staff directly, save for its directors and Strachans but Strachans' role was a purely formal one of receiving and transmitting Subhash's instructions. Thus, the management was, in a formal sense, off-shore.
126. The extent of Subhash's involvement can be seen from this extract of a letter written to Subhash by Strachans following Subhash's termination of their engagement in December 1996 because he thought they were overcharging for their services. The letter is dated 7 January 1997 and reads in part:

"Glen International Limited/Teso International Limited

…

We have always been scrupulously honest with you about our fee rates … What you have difficulty in grasping is that we are the Directors [emphasis in the original] of these companies and as such need to know what is going on but, more importantly, are seen to be people carrying out the actions. You see us as simply as an office you send correspondence to or draft letters for, and do not take seriously our role. Bearing in mind the activities of the company, your involvement and its financial background I think you are taking an unwarranted risk with regard to the U.K. Revenue, in fact for the future I believe the Directors offshore should have more control and you purely perform an accounting function not a decision-making function as you are inclined to do. This is the fundamental difference between our firms, you try to minimise our role, effectively you want a rubber stamping operation, we as Directors are not happy with that condition and hence spend time going through the correspondence you sent us which you think is unnecessary.^[36]"

127. The letter was signed by Mr Richard Egglishaw who was a director of Strachans and had been a director of Glen prior to Strachans' dismissal by Subhash. The evidence suggests that Subhash continued in his decision-making role and in his treatment of the management companies that followed Strachans, in both Glen and Teso, until and throughout trial no. 2.
128. Thus, for the first year of trading, being the year ending 30 June 1990, Strachans were paid management expenses, including directors' fees, of £15,157 in relation to a company with fixed property assets valued at £889,341. The directors only met, outside the United Kingdom and often by a telephone call, to ratify those decisions and transactions that Subhash had taken or instructed that required a Board resolution or director's approval. Subhash was able to undertake these roles because he was Glen's accountant, was acting as the manager of the entirety of Glen's assets being the properties held in its name and was able to assert that he was the owners' attorney and was taking all decisions on their behalf. The passive role played by the directors and management company in Jersey arose from their understanding that the company had been set up by a wealthy overseas investor for tax purposes and that their role was to take their instructions from the owner, who they had never met, via the person who appeared to have the owners' authority to convey their instructions to the directors and the management company.
129. On occasion, Subhash had to manufacture the purported authority of Ramila or Vijaya. Thus, copies of two documents were disclosed by Glen which purported to be authorities signed by Ramila, dated 4 October 1991, and by Vijaya, dated 31 August 1993 and which appointed named individuals as their proxies to vote for them and on their behalf at, respectively, the first and third Annual General Meetings of Glen. Vijaya was, of course, resident in Kenyaand never received a copy of this document to sign and Ramila was adamant that she did not receive documents to sign although, at the date of the document purportedly signed by her, she was resident in England. It would be extremely unlikely that Subhash would have arranged for valid signatures to be placed on these documents by either Ramila or Vijaya since it would have risked Ramila and Vijaya discovering the truth about the misuse of their names in relation to Glen and its property holdings. The signatures did not need to be witnessed and I conclude that the signatures were forged by Subhash so as to enable apparently regular Annual General Meetings to proceed using proxy votes. I also infer that, for reasons of Liberian or Jersey law or as a result of Glen's internal regulations, it must have been necessary for Subhash to obtain the signature of the owners of the shares on the proxy forms. This is because, otherwise, Subhash would have relied on the powers of attorney that he held to provide his signature for and on behalf of the apparent owners of Glen in the same way that he usually operated when undertaking management functions relating to Glen.

5.5 Subhash's Use of Glen, Glen's Assets and Glen's Shares as Beneficial Owner

5.5.1 Discharge of Subhash's Personal Liability to NatWest

130. Introduction. Subhash used the assets of Glen in 1991 in order to satisfy his own personal liability to National Westminster Bank plc ("NatWest"). In the course of doing this, if he was using the names of Ramila and Vijaya in a bona fide manner, he exposed them to substantial liabilities to third party lenders which they had no knowledge of. These uses of Glen's assets therefore suggest that Subhash was using his own assets for his own purposes.
131. 83a Riverside. Subhash and Neil purchased 83a Riverside on 31 March 1988 for £217,000. In order to raise the purchase price, they had to borrow the sum of £150,000 from NatWest in the name of Mukesh since neither of them was able to borrow further sums from NatWest in his own name given the loans that they had already taken out from that bank^[37]. Subhash told the NatWest manager, Mr Terry Martin, who he was dealing with that the loan would be repaid within 4-6 weeks^[38]. In fact Subhash and Neil were unable to repay the loan within that time-frame and it was still outstanding on 21 December 1990 when Subhash wrote to Mr Martin stating that he was

"in the course of making arrangements to pay you the quarter's interest and hopefully clear the capital sums outstanding on Mukesh's and Neil's Loan Account^[39]".

132. The arrangements to which Subhash referred in his letter to Mr Martin were the raising of the money, required to repay the outstanding loan, by way of mortgages on ex-SPC properties that Ramila had purportedly agreed to transfer to Glen. These mortgages were two, for £70,200 and £58,750, raised from Leeds Permanent Building Society on the security of 20 Morton Road and 165 Clive Road respectively and two, for £40,500 and £42,500, raised from Woolwich Building Society on the security of 20 and 20A Fairthorne Road respectively^[40]. Because the building societies would not lend directly to Glen, as an off-shore company, Subhash arranged for Glen to grant long leaseholds to Vijaya (165 Clive Road and 20 Fairthorne Road) and Ramila (20 Morton Road and 20A Fairthorne Road) and for mortgages to be granted over each of those properties^[41]. The total sum raised was just over £208,000 and the monies were received in two tranches of £128,250 odd on 3 May 1991 (from the Leeds Permanent) and £80,050 on 20 June 1991 (from the Woolwich)^[42].
133. It is clear that the purpose for which these monies were raised was to discharge Subhash's personal liability to repay the loan advanced to enable Subhash to purchase in his name 83a Riverside Drive and that it was Subhash who dictated the purpose for which they were raised and who organised their raising. Thus, in a letter Subhash wrote to Mr Gordon Holdich, a Senior Manager of NatWest, dated 8 July 1991, he informed him:

"Therefore you have absolutely no cause to worry about these accounts as Terry Martin would have reassured you and we have done so. We have paid you over £207,000 since our meeting … I would like you to transfer the sufficient amount of money from Neil's account to close Mukesh's account as was agreed at the time." [emphasis added]

134. The figure of £207,000 referred to by Subhash in this letter to Mr Holdich was almost identical to the total of the funds (£208,000) raised on mortgage on the "Glen" properties in May and June 1991. Of the £207,000 paid to NatWest, £80,050 was initially applied to reduce Neil's indebtedness to NatWest arising from the loan he took out to meet SPC's tax assessment. However, pursuant to Subhash's letter to Mr Holdich, £20,027.67 of this was transferred to the loan account in Mukesh's name to close that account^[43]. Thus in all approximately £147,000 out of the monies raised on the mortgages in the names of Vijaya and Ramila was applied to pay off the loan account in the name of Mukesh for which Subhash was liable.
135. Subhash was able to implement this scheme because he held powers of attorney from Ramila and Vijaya which enabled him to execute the leases and the mortgages on their behalf^[44] and he was able to direct the directors of Glen what to do. The result was that approximately £147,000 of what on the face of it were Glen's monies was used to repay a personal liability of Subhash's. There is only one possible explanation for these transactions. This is that Subhash was himself the true beneficial owner of Glen and he disposed of its assets on this occasion, as on many others, as he saw fit.
136. Support for this conclusion is obtained from a substantial lie told by Subhash at the original trial. Subhash lied in giving evidence about the purpose for which these monies were raised on mortgage from the Leeds and the Woolwich. According to Subhash, these monies were raised on mortgage to pay an instalment of the purchase price due from Ramila to SPC for the SPC portfolio. However, Subhash also stated that, as there were outstanding accountancy fees owed by SPC to SKT, Neil agreed some time in February to April 1991 that out of the mortgage monies raised, the sum of £134,550 would be paid to SKT^[45]. Subhash then alleged that, contrary to the alleged agreement, Neil did not pay SKT the promised sum of £134,550 but instead, unbeknown to Subhash, applied the same towards the loan account in the name of Mukesh at NatWest established to enable Subhash to purchase 83a Riverside^[46].
137. Since Ramila did not owe SPC anything, the loans could not have been intended to enable her to pay SPC. This evidence was therefore a lie. It is obvious why Subhash made up this story. It was to enable him to provide an explanation, which he needed to avoid his case at the original trial being fatally undermined, as to why assets apparently owned by Glen had been mortgaged to raise monies to repay Subhash's personal indebtedness to NatWest.

5.5.2 Subhash's Explanation of Glen's "shareholder's loan" Account Shows Subhash as Glen's beneficial owner

138. The opening year's accounts for Glen up to 30 June 1990^[47] contain figures on page 4 in the Balance Sheet for "Properties" of £889,342 and "Creditors" of £878,648. Note 6 on page 5 explains that the latter figure:

"represents loan accounts which are currently interest free, and not payable on demand".

The corresponding note in the subsequent year's accounts up to 30 June 1991^[48] states:

"This represents Overseas loan accounts which are not payable on demand. Interest payable will be rolled up. No provision is made in these accounts."

139. According to Mr Barby, in an affidavit that he prepared with the assistance of Subhash during the preparation by Glen and Teso's then legal team of Glen and Teso's Points of defence:

"Glen's accounts show an increasing indebtedness expressed to be owed overseas … I understand that it represents the assets and funds advanced to Glen by the beneficial owner over the years.^[49]"

140. That explanation can only have been given to Mr Barby by Subhash, since the other sources of Mr Barby's information that he identified in the affidavit, being Mr Shelton and Mr Harjivan, as they both confirmed in their evidence, had no direct knowledge of how Glen's accounts were compiled and also had no involvement with Glen prior to 1997 and 2000 respectively.
141. According to the agreement for sale dated 30 March 1990 between Ramila and Glen, Ramila agreed to sell to Glen the properties she had acquired from SPC save for: (1) properties sold prior to March 1990 and (2) seven properties in Springfield Road^[50]. In return, she was issued with 250 shares in Glen. It is not stated what indebtedness the loan account represented but, if Subhash's explanations were correct, half of this indebtedness must have been created by Glen not paying Ramila whatever was due for its acquisition of Ramila's properties and half must have been provided by Vijaya as a loan. This assumption arises because:

(1) The agreement for sale clearly intended that Glen would make a payment to Ramila in addition to the issue of shares in favour of Ramila.

(2) According to Subhash, when Ramila agreed to transfer these ex-SPC properties to Glen in March 1990, 250 shares were issued to Vijaya (in addition to the 250 shares issued to Ramila):

"… because Ramila needed some monies to be put in^[51]"

(3) Further, according to Subhash, Vijaya acquired Ramila's shares in November 1990^[52].

142. Thus, the beneficial owner of Glen in the first accounting year up to 30 June 1990 was, on the basis of Subhash's explanation, Ramila and Vijaya jointly since each had 250 of the 500 issued shares registered in their name. 249 of Ramila's holding were re-registered in Vijaya's name in November 1990 so that, from that time onwards, Glen's beneficial owner was, on the basis of Subhash's explanation, Vijaya. Furthermore, on Subhash's case, the loan account up to November 1990 must have been jointly owed to Ramila and Vijaya as the owner so that each individually was owed half the sum shown in the loan account. In other words, the loan account was made up of the sum Glen was liable to pay Ramila for her properties combined with an identical sum that Vijaya loaned Glen.
143. Following Vijaya's acquisition of Ramila's shares, the whole of the combined sum must have been solely owed to Vijaya since the same sum was shown in the loan account as being due and this, according to Subhash, was due to "the owner". The only way that the loan account could have remained the same size on this basis would have been if Vijaya had paid Ramila directly on behalf of Glen the sum owed to Ramila by Glen when she acquired Ramila's shares. If that happened, Glen would still owe Vijaya, as the new owner, the same sum as it had previously owed the joint owners.
144. Glen's Balance Sheet as at 30 June 1990 shows the "loan accounts" figure as £878,648. It follows from paragraph 126(2) above, that the monies "put in" by Vijaya, on or about 30 March 1990, must have been about half that amount, or £439,325. Glen's Balance Sheet for the following year shows the "loan accounts" figure as at 30 June 1991 as £872,527. It also follows from paragraphs 127 and 128 above that Vijaya must have paid Ramila £436,262, for the purchase of her 250 shares in November 1990 so as to have discharged Glen's indebtedness to Ramila and so as to have enabled Glen's indebtedness to her to become £872,527.
145. However, neither Ramila nor Vijaya was the beneficial owner of Glen during this period. Moreover, the evidence that I have accepted of each of them is that neither of them (a) were issued with any shares in Glen (b) disposed of or acquired any shares in Glen (c) made payment of or received any monies for shares in Glen or (d) made a payment of or received approximately £440,000 on or about 30 March 1990 and approximately £436,000 in November 1990 nor any sums of such amounts at any time^[53]. The evidence of both sisters was that Vijaya did not pay, and could not have afforded to pay Ramila, and Ramila did not receive from Vijaya or anyone else some £875,000 over the space of six months in 1990.
146. The conclusion is that Subhash was "the owner" in whose favour the loan account was opened and maintained into and beyond 1991.
147. 5.3 Proceeds of Sale of ex-SPC Properties Registered in Ramila's Name
148. Further, between July 1989, when Glen was formed, and 30 March 1990 the following ex-SPC properties were sold on the open market to third Parties^[54]

Property Date of Sale Sale proceeds

4 Cornflower Terrace 27 July 1989 £71,000

40 Reid haven Road 29 January 1990 £61,000

Total: £132,000.

149. Note 4 to the 1990 accounts states that the freehold properties of the company "At Cost & Legal Fees" were valued at £1,002,249 at the beginning of the year, and that during the year there had been "Additions & Improvements" of £18,646 and "Disposals" of £131,533, so that at the end of the year their value was £889,342. The figure of £132k is very close to the "disposals" figure of £131,533 shown in note 4 to the 1990 accounts with the difference presumably reflecting legal fees.
150. Further, as stated above, note 4 to Glen's accounts for the year to 30 June 1990 shows disposals during the year of £131,533 reducing the value of Glen's properties to £889,342 at the year end. That figure broadly corresponds to the figure of £878,648 shown for the loan accounts (shareholder's loan) as at 30 June 1990. The implication is that the owner's loan account has been reduced by the proceeds of property disposals. But that also implies that the sales proceeds were received by Ramila and Vijaya. However, their evidence was that they were unaware of the sales of 4 Cornflower Terrace and 40 Reidhaven Road and did not receive any part of the proceeds of sale^[55]. Nor was any part of the proceeds of sale used to pay the "purchase price" which, on Subhash's case, Ramila still owed SPC under the March 1988 Transfer. This is because, even on Subhash's own account as to how instalments of the "purchase price" were paid during SPC's financial years to 30 September 1989 and 30 September 1990 respectively, no payments were made to SPC out of the proceeds of sale of 4 Cornflower Terrace in July 1989 or 40 Reidhaven Road in January 1990^[56].
151. Thus, the only circumstances in which the accounts of Glen for the years ended 30 June 1990 and 30 June 1991 could have presented a true and fair view of the company's financial position was if the true beneficial owner of Glen was some one other than Ramila and/or Vijaya. Furthermore, the proceeds of sale of two properties allegedly beneficially owned by Glen having previously allegedly been beneficially owned by Ramila were paid to and used by someone other than either of them. As already stated above, there is no available candidate for such person other than Subhash himself.
152. 5.4 Conclusion: Ownership of Glen in Period 1990 - 1995
153. Overall, there is overwhelming evidence that Subhash was and regarded himself as being the beneficial owner of Glen in and after 1990. This follows from the evidence of how Subhash used Glen and its portfolio and from the overwhelming evidence of Ramila and Vijaya that they had no involvement in, or knowledge of, the ex-SPC properties, Glen or its shareholding or their apparent involvement in them.

5.6 Ramila and Vijaya's Further Powers of Attorney

154. Ramila did sign a second power of attorney in favour of Subhash dated 1 July 1993. She did not remember the circumstances in which she signed this power of attorney but she could only have signed it on the basis that Subhash stated that it was wanted in connection with the Jayaben Trust. At that time, there was growing concern about the way that Nilesh was apparently failing to account to the trustees of this trust arising out of income from properties bought with trust funds which Nilesh was managing. These properties had nothing to do with, and were not connected with, any of the ex-SPC or ex-William's Estate properties and no monies associated with those other properties were intermingled with the Jayaben Trust fund. The trustees of the Jayaben Trust were Subhash and Ramila, and Subhash was, as Ramila understood the situation, attempting to regularise the accounts of the trust. It was for this purpose that Ramila thought that she was providing Subhash with her power of attorney.
155. In the light of his previous failure to provide Ramila with any information about the ex-SPC properties, her apparent ownership of some of those properties or Glen, it is clear that Subhash would not have provided any explanation about the properties held in her name or of her single share in Glen. By 1993, Ramila's only involvement in Glen and its properties was as the holder of a single share and as bare trustee of properties that had been sold to Glen but, so as to save on stamp duty, had not been formally registered in Glen's name. It is inconceivable that Subhash would have explained to Ramila that the power of attorney was wanted in connection with either the share or the properties. Thus, although Subhash probably wanted an up to date power of attorney to enable him to complete the conveyancing of the properties from Ramila to Glen, the use of this power of attorney after July 1993 by Subhash was on the same unauthorised basis as his use of the December 1985 power of attorney.
156. Vijaya also signed a second power of attorney in favour of Subhash dated 19 May 1994 before an advocate in Kisumu, Kenya. Her evidence about this, which I accept, was as follows:

"In May 1994 I was sent this unsigned power of attorney by Subhash asking me to sign it and return it to him. Neither I nor my husband understood what it meant. My husband took the document to a local lawyer who tried to explain but neither I nor my husband understood what he was saying. The lawyer asked us what the relationship was and I said he was my cousin brother. The lawyer said in that case it should be alright. As a result I signed and returned the document to [Subhash].^[57]

157. This power of attorney was provided without any disclosure to Vijaya of the interest she nominally had in Glen or its shares or in any properties previously registered in her name. The power of attorney was, therefore, identical in its scope to the previous power of attorney she had provided to Subhash in 1988. Although general in scope, it was not intended by either Subhash or Vijaya to cover transactions in properties which were not intended to be beneficially owned by Vijaya and for which her name was being misused by Subhash without her knowledge or authority.

5.7 Appointment of New Management Company and Directors

158. On 20 December 1996, Subhash wrote to Strachans out of the blue a letter challenging Strachans fee levels. The letter was couched in extremely intemperate language and, in effect, accused Strachans of dishonestly seeking to charge Glen and the beneficial owner of Glen excessive fees. The letter came out of the blue and was addressed to Mr Egglishaw who was, as part of the management services being provided by Glen, its chairman and one its directors. Part of what Subhash said, which gives a flavour of the letter, was:

"I have to put you on full notice that you have not been honest with me about your fee rates and your claims are totally wrong. I have done a full analysis of all the work that your alleged people have done on this company, I do not accept that its continuously active (sic) throughout the year (meaning your firm doing very substantial work) as I have been copying correspondence only to your office.

… Therefore, in view of your letter and very unhelpful attitude, as I may put it, the clients are very very concerned and have telephoned me to instruct me to transfer their business to their new advisors. You will be getting the necessary letters through the solicitors and the new advisors."

159. Mr Egglishaw responded in a temperate manner but set out the nub of the difference between himself and his firm with Subhash. An full extract of that summary has been set out above^[58]. In short, Mr Egglishaw was stating in clear but restrained terms that Subhash was not prepared to allow the management company and directors of Glen any management function and regarded the firm managing the company as nothing more than a post box to receive copies of letters written by Subhash "as Accountant and Attorney on behalf of the clients" as Subhash constantly referred to himself as. It is clear that Subhash's real reason for terminating Strachans' engagement was that they and the directors of Glen were not prepared to allow him to run Glen and take all management and executive decisions himself nor were they prepared to be treated as a post box. As clear evidence of Subhash's role in Glen and its shareholding, he never discussed the change of advisors with either Ramila or Vijaya and, indeed, told a clear and unvarnished lie when stating to Mr Egglishaw that he had received a telephone from "the clients", that Ramila and Vijaya had expressed themselves to be "very very concerned" and had instructed that "their" advisors engagement be terminated and transferred to new advisors. These lies, and the failure to discuss the matter with them or to inform them of the need to instruct new advisors or to introduce them to the new advisors is the clearest possible evidence that Subhash regarded himself as "the client" and as the person entitled to the beneficial ownership of Glen and, through Glen, its assets.
160. Following this concocted dispute about fees and the termination of Strachans' retainer, a new management company, Anchor Trust Company based in Jersey, was engaged and new directors were appointed to Glen. It would appear from their limited involvement in the running of the company and in the absence of Board Meeting minutes recording decisions taken by the directors, that Subhash's iron grip on the running of the company continued after 1995.
161. One of the new directors was Mr Barry Shelton. Originally, on 13 June 1997, he was appointed as an alternate director to Mr Michael Power who was also appointed a director on the same date. However, on 3 January 1998, Mr Power resigned as a director and was replaced by Mr Shelton. Mr Shelton remained a director of Glen throughout the subsequent period until his management role was taken over by the purported appointment of administrators^[59]. Mr Shelton was a prominent witness at the trial and was the only active director of Glen and, as he correctly described himself:

"I have been primarily responsible for the formal management of Glen"^[60].

General Overall Management and Control of Glen and Teso

162. The reason for Mr Shelton being responsible only for the formal management of Glen is that Subhash was allowed to continue to manage Glen and its properties and to take all decisions relating to its property investment and management. This was done through SKT from its offices in Woolwich^[61]. It was clear from the evidence, particularly the copies of correspondence sent by Subhash to Glen, particularly Mr Shelton, that was obtained from Subhash's hard drive, that Subhash took every decision relating to the appointment, dismissal and re-appointment or new appointment of the directors of Glen and Teso throughout their history, that these decisions were taken without his consulting anyone else and that his instructions about these appointments and retirements were taken without anything other than a formal resolution being passed by the Board of Directors.
163. There is no disclosed correspondence or other communication from any director other than Mr Shelton and the communications emanating from Mr Shelton and those sent to him were all to or from Subhash. In the years after 1995, neither of these companies held Board Meetings on a regular basis and those that were held were held by telephone and appear merely to have adopted resolutions needed to implement Subhash's instructions. Most correspondence from Subhash, who is clearly not computer literate and who never himself sent an e-mail, formerly refers to himself as attorney or accountant for Ramila, Vijaya or Mr Harjivan as the case may be, it is clear from the evidence that he never consulted any of these people in relation to any of Glen's affairs. All correspondence included instructions or complaints and criticisms of the actions of other professionals. However, sometimes the mask slips and the communication is written as if the instructions are being given by the owner of either Glen or the property in question.
164. Mr Shelton accepted that he received an inordinate volume of communications from Subhash and that these communications always contained instructions to him which Subhash expected him to implement. He contended, somewhat weakly, that he always regarded himself as exercising an independent role as the principal director of Glen, during the time he was a director or alternate director from 1997, and that he only implemented Subhash's instructions when he agreed with them. He claimed to have disagreed with instructions in writing on a number of occasions but no such communication was disclosed or emerged from the discovery and document seizure of Subhash's documents. Mr Shelton even volunteered during his cross-examination to produce copies of communications in which he challenged or disagreed with Subhash's instructions but although he was subsequently recalled to the witness box for further questioning on other matters and also had every opportunity to search out and provide to the court such documents, none were ever produced.

5.9 Overall Conclusion – Beneficial Ownership of Glen

165. The overall conclusion from the evidence, both from the specific evidence referred to in this judgment and from a reading of the totality of the voluminous quantity of documents adduced in evidence, being all of the relevant disclosed documents and those obtained following the search and seizure warrants or disclosure directions, is that Subhash acted throughout as if he was the beneficial owner of both Glen and Teso and, through them, all their assets, that he was free to do what he liked with all assets, that he controlled and managed both companies and that whoever was appointed as director merely acted as a post box or as someone who would unquestioningly implement whatever instructions were received.
166. Subhash's control extended to unilaterally deciding which professionals should be appointed to act for Glen and Teso, what they should be remunerated and when they should be dismissed. Subhash clearly has a propensity to challenge and complain about the actions and charging levels of all who are working for him or for Glen and Teso so that the documentation is replete with letters complaining, accusing or criticising the actions of the many professionals who acted in the lengthy period under review.
167. The net result was that many different firms of solicitors acted for Glen and, hence, Subhash in that period. Each was instructed on the basis of Subhash's powers of attorney and so he must have repeated the lie that he was acting for Ramila or Vijaya or, after 2000, Mr Harjivan with their knowledge and, often, on their direct instructions, on innumerable occasions. I found no occasion where Subhash stated that he had been instructed by, or had been contacted by, any of these three shadow individuals where the person in question had in fact contacted Subhash or had been informed contemporaneously of the matter in issue. Although most letters contained a statement that they had been copied to the individual allegedly instructing him to send the communication, it was apparent that no such copy was ever sent out. As was also apparent, Subhash resorted to forging either Ramila or Vijaya's signature on a significant number of documents which were of a kind that they, as owner, would be expected to send or sign, so that the power of attorney would not be sufficient, but which it is clear that they never saw, discussed, had drawn to their attention or were shown.
168. The overall conclusion is that Glen and Teso were beneficially owned by Subhash, were considered by Subhash to be beneficially owned by him and were considered by the directors of both Glen and Teso to be beneficially owned by Subhash (albeit that such assets were subject to SPC's overriding interest and tracing claims).

6 Teso's Formation, Control, Charges and Beneficial Ownership

6.1 Teso's Formation

169. The best evidence as to why Teso was formed that was adduced at trial no. 2 is to be found in a letter written by Mr de Figueiredo of Strachans to Subhash that is dated 5 December 1995. This reads in part as follows:

"Dear Mr Thakrar

Teso International Group Limited

Further to our recent telephone discussions in connection with the problems at 57 Landsdown Lane and the High Court Injunction, I now enclose a letter from the Directors of Glen addressed to yourself confirming your appointment as Property Agent for the company with the authority to carry out whatever actions you deem necessary in defending and maintaining the company's stock of property. I trust this letter is satisfactory, but if you require any amendment do not hesitate to contact me.

One of the further points of discussion that we had was your request for a new BVI company to be incorporated which would be used to take a charge on the properties currently owned by Glen so as to protect them from any claims made against the company. … I have now arranged for a company with [the name Teso International Group Limited] to be incorporated and now enclose a copy of the Certificate of Incorporation whereby you will see that the company was incorporated on 22^nd November, 1995.

My understanding is that the new company will acquire the shares currently issued in Glen in exchange for the debts due by the company to the Shareholders and, at the same time, will take a charge over the properties owned by Glen as security for the loans. You will no doubt be instructing Claremont Smith to deal with the various legal formalities."

The purpose in forming Teso, as summarised in the middle paragraph of Strachans' letter, was confirmed by Subhash when giving instructions to Shelton & Co for the management of Teso. In those instructions, Subhash stated that Teso's only purpose was "NON TRADING – will hold charges over properties in the UK" and that Teso would "… hold charges over properties to save overseas owners from other risks etc".

Teso was incorporated in the British Virgin Islands and it issued two shares which were allotted to Vijaya on Subhash's instructions. One of these two shares was registered in the name of Anchor Management Limited and the other was Anchor Management Services Limited and each made a declaration of trust of that share in favour of Vijaya. Subhash appointed Anchor Trust Company Limited of which Subhash arranged for directors to be appointed. Anchor Trust Company Limited, and hence Teso's management, was formally Jersey-based. Apart from its different country of origin and incorporation (BVI instead of Liberia), the structure, shareholding, shadow off-shore management and overall control and decision-making of Teso were identical to Glen with Subhash being the guiding hand.

6.2 Teso's Business and Charges

170. The best evidence of Teso's business is contained in evidence given by Mr Barby , a director of Teso. He said:

"Q. Did you discuss what the nature of the companies was that you were taking over?

A. Well, yes, and in this particular case I discussed it with Mr Shelton, who said effectively Teso was inactive, a company which simply held charges. I do not think we discussed it. There were not any loans. In fact, I am reasonably certain that we did not. My understanding of what Teso was, as it were, on day one was it was a company that held mortgages.

Q. Mr Shelton said that the raison d'étre, and that is his phrase, of Teso was simply to hold mortgages. They did not have to be all over the place. Its job was to be a barrier to genuine third Party creditors of wherever the entity was or whoever the person was over whom the charge was placed, or the property lien was placed. Are you aware of that?

A. I am aware of that. I read the transcript.

Q. Where you aware of that at the time?

A. I was not aware of that at the time, no I was aware that the companies had a common owner and I was aware that there was a prophylactic quality clearly to the activities of Teso, but I would not say I was aware in the way in which Mr Shelton put it in the witness box, no.^[62]

Mr Barby's Guernsey-based management company took over the management of Teso from Anchor in March 2005. He said that at that time and since then, the company had been effectively "no longer active". It only opened a bank account in 2004, some nine years after its formation.

6.3 Control and Beneficial Ownership of Teso

171. It was clear, therefore, from the outset of Teso's formation that whoever was the beneficial owner of Glen had to be the beneficial owner of Teso since its function was to hold charges over Glen so as to protect Glen's assets from being taken by third parties. Otherwise, the owner of Teso could call in the loan notionally supporting the charges and could then realise the charges and acquire ownership of the property charged from the owner of Glen. It therefore also followed that the beneficial owner of Glen, being the controller of that company, was also the beneficial owner of Teso.

7. Did Mr Harjivan Acquire Legal and Beneficial Ownership of Glen and Teso in 2000 or 2001?

7.1 Introduction

172. The single most important question in the Thakrar Litigation is whether Mr Harjivan acquired full and complete beneficial interest in both Glen and Teso in 2000 or 2001.

7.2 Mr Harjivan, Shelton and Barby's Evidence

7.2.1 Mr Harjivan's Evidence

173. Mr Harjivan's evidence was given in six witness statements, his Points of Defence document and in extensive oral evidence. The following is an extended summary of that evidence. He stated that he had purchased all of the issued shares of both Glen and Teso from Vijaya and Ramila in 1999-2000, that he had paid substantial sums of money for these shares in 1999-2000 and that he was now the current owner of those shares.^[63] His evidence, which of course had been entirely drafted by Subhash^[64] should be set out verbatim. Thus:

"It was some seven years ago that substantial monies had to be paid by me through various Parties for them and/or on their behalf and also the Companies to make sure that there were no unnecessary overdue Loans or claims left and my monies were also paid through various third Parties overseas and this Ramila and Vijaya have known. Subhash always acted for them and family, kept them fully informed, and their families, also."

"Regarding … Ramila and … Vijaya … I was made aware that these were the two ladies selling the offshore Companies and they were paid the consideration and given Value that was agreed for and on behalf of the said Parties. Ramila and Vijaya as well as the family had invested monies and borrowed substantial sums of monies with interest accrued and these were overdue and unpaid. If you look at Glen's accounts it also confirms that there were Shareholders funds, which were accruing interest and no interest provision had been made in the accounts. Therefore, there was a clear basis that substantial amount of monies were due to be paid and these were so paid."

"Vijaya and Ramila had no substantial monies except for many substantial borrowings … with the Debentures of Glen and Teso taken out in 1995/1996 on advice of Solicitors and Subhash acting as financial accountant … So, there is clear evidence that these large sums of money were at one time due, which I have cleared and now replaced those as being Shareholders funds from me and my family."

"… I can confirm that very substantial sums of my monies were introduced into the Companies to repay the outstanding overdue Loans in 1999-2000 directly and indirectly through my various Party/business connections in several overseas countries and also monies paid to or on behalf of Vijaya and Ramila through Subhash instructions or request as their Attorney/Accountant and others as I/we were instructed at the time."^[65]

174. Mr Harjivan did not state in this document how much he either agreed to pay or did pay for these shares in Glen and Teso. By the time Mr Harjivan came to give evidence at the trial, however, he stated and continuously repeated that he had paid £12 million "with all the interest rates all included"^[66]. This figure must have come from Subhash and it could only have been ascertained some time after the date in 2000 on which, according to Mr Harjivan, that the final payment towards the purchase price had been paid. This determination of the purchase price would appear to have been made in December 2005 when Glen and Teso's then legal team were preparing Glen and Teso's Points of Defence^[67].
175. Mr Harjivan stated that he paid this sum in instalments over 1½ - 2 years. It was all paid in cash and no bank account was involved. He was given instructions at various times by Subhash by "small papers" to "pay this amount of money to this family … or pay this amount of money to that family" and Mr Harjivan simply paid what he was asked to pay. Payments were made in cash "because in Africa, because of tax purposes, we use a lot of cash paying bills in Africa" although later in his evidence he stated that the payments that he made were not confined to Africa since "the accountant sent me a document saying the debts were split in three or four countries".
176. The payments were not made in a conventional way. They were not made by bank or other method of money transfer nor did they involve a courier taking money in cash directly to the recipient. Instead, as I summarised Mr Harjivan's testimony in the course of his giving evidence, in a summary that Mr Harjivan agreed with:

"… in general, a transaction takes place like this. Step one: he receives a note telling him of a debt that must be paid. Step two: Mr Harjivan obtains cash or a debt that his company owes or is owed. Step three: he pays the cash or makes a debt transaction in one country. Step four: the person or company that he has dealt with then arranges for a payment to be made or a debt to be dealt with in another country".

177. Mr Harjivan then added:

"It is done this way: there are some people they call intermediates; people who do this sort of business. They get money from you to pay somebody else, so what I did was I called one of these persons … I called them or sent a little note, handwritten like a little piece of paper that I needed to make a payment to somebody else. So I get money, cash, on the money from the country where I am and I pass this to the person who will pay my debt in the other country. From the time I give the money to this person until the money is received at the other end, I really do not know how this goes."

178. In answering my question where he got the money from to make these payments, Mr Harjivan stated:

"The money I took from my own business and also from loans I had with friends. We ask loans to friends, to people we trust, people we know, particulars, individuals, so if I did not have enough money for the payment, from my business, I would ask the remainder of the money as a loan to somebody else and pay the money."

179. Subsequently, when asked the same question in cross-examination, Mr Harjivan admitted that he did not have £12 million in 1999 and said that he raised the purchase price by way of loans from "friends or people I know or people I trust".
180. When he was asked how he learned when the money was finally paid to the person overseas, Mr Harjivan replied:

"This is done by trust. So I would learn that the money was paid just by talking to the person who made the payment, or the person, as soon as they would make the payment, they will just contact me saying: everything is fine, the payment is done. And I very rarely … would contact the person who receive the money to check the money was paid."

181. Subsequently, when asked in cross-examination how he was able to keep track of all the monies that he was paying, Mr Harjivan replied:

"There was no control whatsoever, we just kept paying little by little the debt, and then one day you would learn, yes, the debt was done, finished and that was it really."

182. When asked how he knew when he had finished making the necessary payments, Mr Harjivan said he "learned about the end of the payment from the firm, the accounting firm … So at the end of the debt, I received a letter from them saying that the debt had been paid, and that was it". Mr Harjivan identified that accounting firm as being Subhash's. He stated:

"Q. Which was the same firm who introduced you to Glen in the first place?

A. Exactly.

Q. They told you when you had paid enough?

A. Yes, after I asked them if the debt had been paid in full, yes, they told me everything was correct and they would transfer all the documents to my name."

183. Mr Harjivan's evidence was that "there is no paperwork or any details" evidencing the making of the payments or the amounts paid. However, at my invitation, Mr Harjivan produced a handwritten note purporting to identify the families to whom the payments had been made and the amounts paid to each of them. Mr Harjivan prepared this list overnight from memory and name of the family, the country of residence and the amount paid to each family listed in a round lump sum were added. It was noticeable that the family names were all common Indian names. One example, involving payments totalling £3m, was to a family in Uganda called Ruparelia. This sum represented a debt or debts due to that family from Glen. He was instructed to make payments up to £3m to that family by Subhash although it was not stated what level of detail was provided by Subhash on his chitties nor to whom, when or where these debts were paid and what the debts were for was not stated because Mr Harjivan asserted that his memory was poor and the payments had been made about seven years previously. It was also clear that indebtedness to overseas creditors, other than to the owner of Glen, was not carried in the accounts of Glen and was not known about by Mr Shelton.
184. According to Mr Harjivan, he had no dealings directly with Vijaya and Ramila prior to his purchase of their companies. In fact, Mr Harjivan had never met Vijaya in person but had spoken to her once on the telephone, some fourteen years previously, on the occasion of her brother Bhiku's funeral in June 1986. Mr Harjivan had met Ramila twice – once at Bhiku's funeral and a second time at the wedding of the daughter of the person Ramila had been living with in Lisbon in 1985 and Ramila had made one or two telephone calls to Mr Harjivan's wife just after the wedding. All of these contacts had taken place many years before the alleged sale of the shares.
185. I gave Mr Harjivan a further opportunity to add to his oral evidence that he had given on 12 and 13 July 2006. This he did by way of his second witness statement dated 6 September 2006 and prepared with the help of both counsel and a solicitor. Mr Harjivan was still unable to give any further particulars as to his payment of the purchase price. He stated:

"21. … It was reiterated to me by my new lawyers that it was important to provide more details in respect of the amount I paid which amounted in total to £12m.

Although I have racked my brains since giving evidence and since seeing my new lawyers in August of this year I have been unable to come up with any further details."

186. Mr Harjivan also sought to add to his evidence in his fourth witness statement. He was still unable to be any clearer on details, but sought to make his explanation and his failure to identify any of the people involved seem more credible:

"12. I had agreed to buy the company for £12M. The manner of payment in respect of the £12M followed a traditional approach within the Indian community. The process is very unfamiliar to European business people and understandably perhaps difficult to accept because everything is done through third Parties. The process has a name ("chitty") which when translated means something like "a small piece of paper". It is difficult to give a lot of detail because I am bound by the agreements that I have with those who assisted in this process in that I have agreed not to disclose their details for all sorts of personal and financial reasons.

The process involved identifying monies owed to me by third Parties and instructing those third Parties to make such payments not to me (as had been intended) but direct to others instructed by Ramila and Vijaya to receive the monies for the sale of the shares. I would estimate that approximately 60 to 70% of the purchase price was paid in this way. The balance was raised through personal loans provided on trust through my business associates in India and South Africa. These were people who were all well known to each other and where trust was very high between us."

7.2.2 Subhash's Changing Statements and Mr Shelton's and Mr Barby's Evidence

187. Subhash. It is instructive to trace through the kaleidoscopic changes in Subhash's statements about Glen and Teso's ownership in the period after 2000, being the year in which Mr Harjivan stated in evidence that he had become the owner of these companies.
188. Subhash's statements as to the beneficial ownership of Glen between 2000 and 2005 were so contradictory and inconsistent that they provide no reliable guidance as to who was Glen's beneficial owner in that period. This can be seen from the evidence which I will summarise in chronological order:
189. In cross-examination, Mr Shelton said that in 2000 he was told by Subhash and received correspondence from Subhash that Mr Harjivan had become the sole shareholder in Glen in March 2000. He also stated that he accepted that information as correct since Subhash held both Mr Harjivan's and Vijaya's power of attorney^[68]. His basis for considering Subhash's statement to be correct was misplaced since Mr Harjivan first gave Subhash a power of attorney in June 2001.
190. Glen's Register of Members and Share Ledger, which was disclosed by Glen in these proceedings by way of an exhibit to one of Mr Harjivan's witness statements^[69], showed Ramila to be the registered owner of 250 shares in Glen from 14 April 1990 to 30 November 1990 under share certificate no 4 and, after 30 November 1990, as the registered owner of one share in Glen. The Register also showed Vijaya to be the owner of 250 shares in Glen under share certificate no. 5 and, after 30 November 1990, as the registered owner of 499 shares under share certificate no. 6. The entry for Vijaya in this Register has written on it in manuscript:

"1/6/2000 Share Certificate No. 6 US$499 Disposals 499 Balance Nil T'fd to Mahendra Mr Harjivan".

191. However, no reliance may be placed on this manuscript entry or on the facts it purports to convey and it has no evidential significance. This is because there is no evidence as to who placed this note on the Register, when it was placed there, what the purpose was in placing it on the Register and what the circumstances were that led to the entry being made. Moreover, this informal note or jotting on the Register can have had no legal effect. Glen's memorandum and articles provided a clear procedure for the re-registration of share ownership and for the evidencing of that by the issue of new share certificates and the creation of a formal new entry in the Register, all undertaken pursuant to a Board resolution. Although the memorandum and articles provide for the issue of Bearer Shares, there is no evidence that any Bearer Shares were ever issued save the suggestion by Subhash to Mr Shelton that such shares were issued. This suggestion was not substantiated with any evidence and Mr Harjivan denied in evidence that he had ever received any Bearer Shares. Thus, this manuscript note is to be treated as nothing more than a self-serving jotting placed on the Register, probably a note placed there by Mr Callendar as a reminder of what Subhash had told him during a telephone call^[70].
192. On 27 October 2000, Mr Shelton provided a witness statement, which was supported by a signed statement of truth, in a county court case in which a tenant of a property registered in Glen's name was bringing enfranchisement proceedings against Glen^[71]. Mr Shelton specifically dealt with the question of who was the beneficial owner of Glen as shown in the Statutory Records of Glen that were maintained at his offices in Jersey. His evidence was as follows:

"With regard to the beneficial owner of Glen, I can only confirm what appears on the Statutory records and I can confirm that only Ramila Thakrar's name appears on the Statutory Records."^[72]

193. On 18 June 2001, Subhash wrote to Mr Shelton saying that he had: "been advised over the weekend that [Vijaya] has sold her shares". The letter did not state to whom these shares had been sold, what the circumstances were that involved his being given this information and when it was contended that the actual sale had taken place.
194. On 22 June 2001, Mr Harjivan executed a general power of attorney prepared by Subhash appointing Subhash as his attorney. The significance of the date of the power of attorney appears from the cross-examination of Mr Shelton:

"Q. What evidence did you have in 2000 that Mr Harjivan was the shareholder?

A. In 2000 the evidence was, I have told you, that it came from Subhash Thakrar who held Mr Harjivan's power of attorney and also Mrs Radia's.

Q. In 2000?

A. In 2000 I think it was, yes.

Q. You do understand - obviously you will not know this, Mr Shelton, but I will need to tell you, that there has been a search of powers of attorney granted to Subhash, and in particular, the powers of attorney granted by Mr Harjivan, and the earliest power of attorney that is in evidence and the only earliest power of attorney identified by Mr Harjivan in giving evidence at this trial is dated 22nd June 2001?

A. I am sorry, I thought it was 2000.

Q. So, are you saying that you are misrecollecting or that Subhash misinformed you in 2000?

A. Without looking at the correspondence, I cannot say.

Q. Did Subhash tell you in correspondence then in 2000?

A. I think he did.

Q. But you are not able at this minute to point to a letter, even among those that you brought to court, which makes that reference?

A. No, I did not bring those letters to court. I did not think that date was in dispute.

Q. Even though that in October of 2000, having looked at the statutory records, you produced a statement for use in court saying that in October 2000, Ramila was the shareholder?

A. Again, without looking at the documents that came from Subhash, I cannot be specific about the dates.

Q. So, it might not have been 2000 after all?

A. Well, if the documents - if the correspondence from Subhash says 2001, then it was 2001.

Q. So you have no knowledge independently of the correspondence?

A. I do not have any knowledge independent of the correspondence itself, no."^[73]

195. On 25 January 2002, at Mr Shelton's request, Subhash faxed to Mr Shelton a copy of Mr Harjivan's passport, and enclosed copies of Mr Harjivan's sworn power of attorney in Portuguese and English. These documents were required by Anchor Trust's Compliance Department in order to allow it to formally recognise a new shareholder in Glen. Mr Shelton stated in evidence that, if he had been informed in March 2000 that Mr Harjivan had become the new owner of Glen, he would have required the same proof of Mr Harjivan's identity as he in fact requested in January 2002.^[74]
196. On 25 March 2003, Subhash wrote to Mr Walter Callender at Glen's management company Anchor Trust, because Mr Shelton was on holiday at the time, in connection with a loan that he wanted Teso to make to his son Rishi. Subhash stated that the purpose of this loan was to enable Rishi to purchase a flat out of monies which Subhash stated were "banked" with Teso by Vijaya. Subhash also stated that the loan should be interest-free, and not at the rate of 3% over base which Mr Callender had suggested, because such interest should be set off against the interest which Vijaya was owed and had not been paid by Teso "for the substantial shareholder's loans which have been made over the last 14 years, i.e. from June 1989 to date". In cross-examination, Mr Shelton agreed that that, if shareholder's loans were still outstanding to Vijaya in March 2003, logic dictates that Subhash must have considered that Vijaya was still a shareholder of Glen and Teso in March 2003.^[75]
197. Mr Shelton attempted to reconcile the obvious contradiction contained in Subhash's assertion in his letter sent in March 2003 with his other assertions that Vijaya ceased to be a shareholder in Glen some time previously by stating that his own understanding was that the shareholder's loan referred to by Subhash was not Vijaya's at all, that Vijaya had no such loan and Subhash was mistaken in what he had said in his letter. This extract from Mr Shelton's evidence demonstrates not only how unreliable Subhash's statements were that related to the share ownership of Glen but also how unreliable Mr Shelton's evidence was on the same subject:

"Q. So all you can do is register your extreme surprise that in March of 2003, Subhash was referring to Mrs Radia as the beneficial owner of Glen?

A. I think I have said that many times, that I do not believe that that is correct.

Q. But your belief is simply based on other statements made by Subhash?

A. I have said that many times as well, yes.

Q. But not based on seeing the underlying share transfer?

A. There was no underlying share transfer as such.

Q. All right. I think that cannot quite be right, is it, because otherwise the original shareholder would remain the shareholder.

A. Well, these were bearer shares in Glen. So, whoever holds the bearer shares has title to them.

Q. And you, of course, would have no idea who at any time held the bearer shares?

A. I have never seen the bearer shares.

Q. Apart from what Subhash told you?

A. Exactly."^[76]

198. On 16 April 2003, Mr Laffoley wrote an internal Anchor memorandum to Mr Callender concerning Glen in which he stated:

"Having reviewed and sorted the stats files comments are:-

…

In the Register of Members the last entry on folio 5 (V Radia) you have written that 499 shares were transferred to Mahendra Mr Harjivan on the 1^st June 2000. There is no record of the transfer having taken place i.e. Stock Transfer, Stock Certificate, Minutes. Also I cannot find current share certificates, not even copies and there's no record of where they are being kept.

…

If V Radia is the shareholder (which is correct according to the Statutory Records) then we will need to get KYC [know your client information] immediately".

199. The fact that Mr Laffoley was questioning the entry made by Mr Callender in Glen's Register of Members suggests that the entry had only recently been made. It is significant that Mr Laffoley had been unable to find any documentary evidence of the transfer of Glen's shares from Vijaya to Mr Harjivan in the records of Glen. Thus, so far as he was concerned, Vijaya remained the registered shareholder of 499 of Glen's 500 issued shares.
200. On 29 June 2004 Subhash wrote to Ms Christine Barby of Balchan Management Limited with a copy of the letter being sent to Mr Shelton. The letter informed Ms Barby of Subhash's wish to form two companies in the British Virgin Islands:

"for Mr M Mahendra shareholder in Glen … with a view to procuring air space at Damien Court and also purchase two flats in the same building to enable proper management of Glen …, and its assets in the United Kingdom for Mr M Mahendra and shareholder of Glen …",

and enclosing:

"a copy of the Power of Attorney given to me to act as the attorney and an accountant for Mr M Mahendra in the United Kingdom".

201. It is plain that Subhash's references in this letter to "Mr M Mahendra" are references to Mr Harjivan's son Mitesh and not to Mr Harjivan himself. Balchan Management Limited duly organised the formation of two BVI companies including Thornbridge Ltd and on 6 July 2004 Balchan Nominees Limited, the registered holder of the sole issued share in Thornbridge, executed a declaration of trust of its registered share in Thornbridge in favour of Mitesh.
202. On 30 June 2004 Subhash wrote a further letter to Ms Barby with a copy being sent to Mr Shelton headed "Formation of two companies for Mr M Mahendra shareholder in Glen", and enclosing a BBVA bank statement and a gas bill "for Mr Mitesh Mahendra". It follows that Mr Mitesh Mahendra and not Mr Harjivan was, in these communications, being held out by Subhash as the shareholder in Glen.
203. On 1 July 2004 Philip Evans, a Compliance Officer at Anchor Trust, had a telephone conversation with Subhash about Glen's shares. Mr Evans' file note of this conversation recorded Subhash as saying that "the bearer shares issued some time ago to Ramila and Vijaya are now being held on behalf of Mr Mahendra^[77] in the UK solicitors' office. Therefore the shares although bearer can be in this case said to be in the hands and therefore the ownership of Mr Mahendra as of today". A handwritten note on the file note states: "Updated. Taskforce 1/7/04". According to Mr Shelton, Taskforce was the software system Anchor Trust used to record details of beneficial ownership and similar details. It appeared from this file note that 1 July 2004 was the date on which Mr Mitesh Mahendra was entered onto this system for the first time.^[78]
204. On 8 July 2004 Subhash wrote another letter to Mr Evans which he copied to Mr Shelton "Re: Glen International Limited – Mr M Mahendra" in which (a) he referred to Vijaya and Ramila as having "sold their shares in Glen in March 2002, which Barry Shelton is fully aware of", (b) he requested "the bearer shares" of Glen and (c) he stated that these "are required for Mr M Mahendra [i.e. Mitesh] because he may wish to deal with them, as he sees fit".
205. On 10 August 2004, after the hearing at the LVT at which the solicitor acting for the long leaseholders of 92 East Dulwich Road, Mrs Jennifer Israel, alleged that Glen, Teso and Mitesh were connected persons, Subhash wrote to Mr Shelton in the following terms:

"Re: 92 East Dulwich Road

It is imperative that Teso have a separate address to Glen to avoid any wrongful allegations or claims made in Courts, which are wrong. I have advised their solicitors that they are two separate legal entities with separate registrations, separate Company Incorporations in different Countries and separate Shareholders.

One is a Property investment Company and the other is like a Bank and lender and therefore, they cannot be connected Parties, as wrongly alleged by Jennifer Israel & Co, Solicitors."

206. Mr Shelton accepted in cross examination that this letter was written by Subhash in reaction to the allegation made by Mrs Israel at the LVT hearing that Glen, Teso and Mitesh were connected persons and so as to ensure that this allegation would not be accepted by the LVT or any other tribunal since any such finding would be detrimental to Glen's interest.^[79]
207. On 17 August 2004 Subhash wrote to Mr Shelton "Re: Bearer Shares – Glen". In that letter he now gave the following confusing explanation as to the history of the shareholdings in Glen and the lack of a connection between the shareholdings in Glen and the shareholdings in Teso:

"Further to your telephone call to me today … I have confirmed that the bearer Shares were issued initially, and were previously held by [Vijaya], [Ramila] and their family …

In March 2000, they sold [Glen's] Shares to Mr Harjivan and details of which were given to you. However, your Compliance Officer was making enquiries of me early this year, when I also gave the same information and explained that the bearer Mr Harjivan of Portugal held Shares. He was to issue new bearer shares and send them care of my Office address, which have not yet been sent. Therefore, your record of the Company and shares registration should be corrected, and properly dealt with now …

If the Shares are sold by the Shareholders overseas, then they do not need to concern Glen or if any details of selling considerations or how they have dealt with it, so long as they have been dealt with it properly themselves overseas …

Would you please therefore, confirm that your records are in order, and that there is also a Debenture in favour of [Teso], which is owned by separate family. There is no connection between the two Companies."

208. In cross-examination, Mr Shelton confirmed that it was his belief that the shareholder of Glen and the shareholder of Teso was in fact one and the same person. His response to Subhash's letter of 17 August 2004 is illuminating

"Q. … no doubt, having looked at this letter at the time it was sent to you and the suggestion that the shareholders in Teso and Glen were owned by separate families and Subhash's assertion that you agreed with him that that was the position, surely that is a matter that you would have taken up with Subhash?

A. Not necessarily.

Q. Could you explain why not?

A. Because I think as you pointed out, some of the letters are not strictly rational.

Q. Not strictly rational, did you say?

A. Yes.

Q. But this goes a little beyond that, does it not, because according to your understanding, the shareholder of Teso had to be the same as the shareholder of Glen, given the purpose for which Teso was created?

A. Subhash writes letters as he would like things to be rather than as they actually are. And I think you can appreciate that from a lot of the correspondence. To reply to every single sentence and paragraph and letter of Subhash's would just take an inordinate amount of time and probably he would change his mind again next week. So, you would have wasted an inordinate amount of time as well."^[80]

209. On the same date, 17 August 2004, Subhash wrote to Mr Laffoley "Re: Shareholding Teso". In this letter, he now gave a parallel and equally confusing explanation as to the history of the shareholdings in Teso and the lack of any connection between the shareholdings in Teso and the shareholdings in Glen:

"You will recall that the shareholding in the above Company has always been in the name of [Vijaya] and her family.

They also have a Debenture, and this was given to Teso from Glen in November 1996.

[Glen's] shareholding changed in March 2000 …

I would like to make sure that there is no relationship between Glen and Teso … other than as a borrower and lender, and also that we should now have separate Offices address in Guernsey to avoid any confusion with Glen in Jersey.

I had a telephone call today from Barry Shelton, the Compliance Officer, and a Barrister, who were obviously confused and not looking at the correct information. So I thought it best to write to you to make sure that Teso's affairs are not unnecessarily confused with those of Glen, because of the same office, and the recent concerns, which we have shown to you, due to the Debenture and 92 East Dulwich Road Court proceedings.

There are two separate families in two separate parts of the world, which separately owns each Company, and Teso does not operate or have any business in the UK, which is clearly known to all concerned.

…

I look forward to hearing from you as soon as possible regarding the Shareholding and if any Trustees agreements were wrongly drawn up by Anchor Trustees then they should be corrected with urgency.

I have to also advise the appropriate clients' to make sure that their affairs in the United Kingdom are properly safeguarded … but we cannot have your records, which vary and do not properly record the proper beneficial owners/shareholdings and their current positions, as they must be reflected properly to ensure that no challenges are made by anybody including UK Courts."

210. On 18 August 2004, Subhash wrote to Mr Evans about Teso stating that "[Vijaya] is the current owner of the Shares and all the relevant details are also with the Company. There is will be some changes, I am advised, but that she and family are considering, which shall be conveyed to you in due course".
211. On the same date, 18 August 2004, Subhash wrote a further letter to Mr Evans about Glen in which he apologised for his earlier reference to Mitesh as the owner of the shares in Glen:

"I have looked at my letter of 8 July 2004, and certainly it was a typing error, because Mr Mahendra Mr Harjivan is the Shareholder and not Mr M Mahendra. I do apologise for that typing error by the Secretary."

Subhash's reference to Mr M Mahendra in his letter of 8 July 2004 was plainly not a typing error. In the 8 July 2004 letter, Subhash clearly meant to refer to Mitesh as the owner of the shares in Glen, as can be seen from his other contemporaneous correspondence^[81].

212. On 24 September 2004, Subhash drafted a letter purportedly from Vijaya to Ms Marina Buckley at Anchor Trust "re Teso and Glen" instructing her "to arrange for the Share transfers to be effected urgently" as she had sold her shares and "received the full consideration for her shares".
213. Mr Shelton. The correspondence and documents summarised in paragraphs 174 - 198 may be compared and contrasted with the following exchanges between myself and Mr Shelton and Counsel for Party 2 and Mr Shelton during Mr Shelton's cross-examination:

(1) "A. My evidence is that Mr Harjivan, from I think it was March 2000, was the beneficial owner of Glen.

Q. JUDGE THORNTON: What is the basis of your being able to say that?

A. The basis for being able to say that is the correspondence from Subhash Thakrar.

Q. JUDGE THORNTON: How do you know that Subhash Thakrar's statements are correct?

A. Well I only know that from Mr Thakrar."

(2) "Q. Is this not really an example of how Subhash, over the years, has played fast and loose with the identity of the beneficial owner of Glen?

A. All I can do is respond as I say, that as a matter of fact, there are some letters for which -- which he has written, which claim that the owner of the shares has changed from time to time.

Q. And he has given you different names and different dates on different occasions?

A. He has given other people different names and dates but he has not given them to me.

Q. Well you see, the trouble is, there is nowhere in evidence that I have been able to find of a communication from Subhash to you stating the date at which it is said by him that Mr Harjivan became the shareholder of Glen.

A. Well, certainly this letter itself, 17th August 2004, says March 2000.

Q. And indeed, the July letter said March 2002.

A. That does not seem to tie up with your recent statement that you could find no evidence. Are you saying you can find no contemporary evidence?

Q. That is correct. That is correct.

A. There is certainly evidence that predates this because the enquiries with the Inland Revenue were before 2004 and at that date I had informed the Revenue that Mr Mahindra Mr Harjivan was the owner of Glen, so that must be somewhere in Glen's records.

Q. The point I was making, Mr Shelton, is that at different times and on different occasions, Subhash has given different names as the beneficial owner of Glen and also different dates as to when Mr Harjivan became the beneficial owner.

A. I agree with that."

(3) "Q. … Now, Mr Shelton, firstly, the purpose of my questioning was simply to point to you and to the court that Subhash over the period of 2000 to 2004, regularly changed his mind as to who was the owner of the shares and as to when they had acquired those shares and you accepted that that indeed did change over time -

A. I agree with that."

(4) "Q. It is right, is it not, that the only possible explanation that could make sense of all the various documents and correspondence that we have seen, is that the name given by Subhash as to who, from time to time, is said to be the owner of the shares in Glen and Teso was wholly immaterial because in reality, it was Subhash himself who at all times owned and controlled the shares?

A I cannot say that for certain." ^[82]

7.2.3 General Evidence that the Same Person was the Beneficial Owner of Both Glen and Teso's Shares

214. It is clear from the evidence that the genesis and purpose of Teso was such that whoever was the beneficial owner of Glen also had to be the beneficial owner of Teso. The purpose behind the original formation of Teso appears from the letter dated 5 December 1995 from Strachans, the company agents, who incorporated Teso, to Subhash:

"One of the further points of discussion that we had was your request for a new BVI company to be incorporated which would be used to take a charge on the properties currently owned by Glen so as to protect them from any claims made against the company. You indicated that the preferred name for the company would be Teso International Limited, but having applied for this name in the BVI it was unavailable, but the name Teso International Group Limited was available and I have therefore arranged for a company with that name to be incorporated and now enclose a copy of the Certificate of Incorporation …".

215. Mr Barby's evidence, based upon what he had been told by Subhash, was that:

"Glen's accounts show an increasing indebtedness expressed to be overseas … The historic debt accrued long before my involvement with Teso. I understand that it represents the assets and funds advanced to Glen by the beneficial owners over the years. I am informed by the Bankrupt [i.e. Subhash] that Teso was formed in or about 1995 in order to take security for that debt in favour of the beneficial owner who had funded Glen."

216. Accordingly, the shareholder of Glen and the shareholder of Teso had, both logically and practicably, to be one and the same person, because it would not make sense for the owner of Glen to permit his shareholder's loan held in Glen to accumulate in circumstances where the assets of Glen were subject to charges in favour of a company (Teso) owned by somebody else.
217. Mr Shelton's evidence overall was that the shareholders in Glen and Teso were one and the same person for this very reason. Indeed, he characterised Subhash's attempts in August and September 2004 to present Glen and Teso as independent companies, in response to an allegation made in enfranchisement proceedings brought against Glen that Glen and Teso were connected as "not strictly rational".^[83]

7.3 Mr Harjivan's Evidence Analysed

7.3.1 Introduction

218. The claiming Parties asserted that Mr Harjivan was not the beneficial owner of the shares in either Glen or Teso on five principal and related grounds:

(1) The evidence given by Mr Harjivan was so improbable as not to be credible.

(2) Mr Harjivan was a witness who was shown to have lied in many particular but important respects both when giving evidence and on a number of occasions over the years prior to giving evidence.

(3) Mr Harjivan did not pay to, or to the order of, Vijaya and Ramila, and Vijaya and Ramila did not receive from him, any consideration for the shares let alone £12 million.

(4) Vijaya and Ramila were not, and never had been, the beneficial owner of any of the shares in Glen or Teso and Mr Harjivan never agreed with anyone, let alone the beneficial owner of the shares, to purchase any of them.

(5) Subhash was and remained the beneficial owner of these shares and he demonstrated that he considered himself to be the beneficial owner of both the shares and the two companies whose shares they were by his actions and assertions in the entire period from 1998 until July 2007.

(6) Mr Harjivan never acted as if he were the beneficial owner of Glen or Teso, he never received any benefit from his alleged beneficial ownership of their shares and he never took any effective decision about, or gave any directions to those who managed, either Glen or Teso.

219. In summary, the claiming Parties contended that it was clear from all the evidence that Mr Harjivan was not, never was and could not be the beneficial owner of the shares in Glen or Teso. They contended that his evidence that he purchased the shares in Glen and Teso from Vijaya and Ramila at some stage in the period 1998 - 2001 for a purchase price of £12 million was a piece of fiction that was dreamed up by Subhash. Mr Harjivan was merely the mouthpiece of this fiction, albeit, in repeating it, he actively connived in it. In short, they contended that there was no contract between Mr Harjivan as buyer and Vijaya and Ramila as seller for any of these shares. This was because there was no agreement relating to the sale and purchase of these shares, the shares were not Vijaya and Ramila's to sell and Mr Harjivan did not become their beneficial owner because he did not pay to, or to the order of, Vijaya and Ramila, and Vijaya and Ramila did not receive from him, any consideration for the shares, let alone £12 million.
220. I will examine these strands of the claiming Parties' case in turn.

7.3.2 Incredible and Unbelievable

7.3.2.1 Introduction.

221. The claiming Parties contended that what Mr Harjivan said in evidence, both written and oral, should be rejected because it was inherently incredible and self-contradictory.

7.3.2.2 Incredible Nature of Mr Harjivan's Evidence about the Purchase of Shares in Glen and Teso

222. Mr Harjivan's evidence has about it the distinct air of unreality, make-believe and fantasy. It collapses altogether when set against the rest of the evidence and the surrounding facts and circumstances. I will analyse Mr Harjivan's evidence under different headings.
223. Ramila and Vijaya. According to their evidence, in 1999-2000 neither Ramila nor Vijaya had any knowledge of Glen or Teso, or of their being or supposedly being the legal or beneficial owners of those companies, or of their supposedly having acquired the shares in those companies, or of the sale of the shares in those companies to Mr Harjivan, or of any supposed indebtedness on their part to third Parties overseas, or of any receipts of substantial sums of money overseas whether from Mr Harjivan or otherwise, or of the supposed discharge of their supposed indebtedness to third Parties overseas. I have already accepted the evidence of Ramila and Vijaya when they stated that they were not wealthy, indeed they are both in relatively modest circumstances. It is not credible that women of their modest financial circumstances could have built up indebtedness to third Parties of some £12 million or anywhere close to such a sum in 1999-2000.
224. Irreconcilable conflict between Subhash's evidence in 2003 and Subhash/Mr Harjivan's evidence in 2006. What Mr Harjivan now alleges about the involvement of Subhash in the sale and purchase of the shares in Glen and Teso is contradicted by the oral testimony given by Subhash at the original trial in 2003.
225. In the Points of Defence signed by Mr Harjivan, Subhash/Mr Harjivan maintained that Subhash had acted for Vijaya and Ramila on the sale of the shares as their attorney/accountant, had arranged for monies to be paid by Mr Harjivan to them or on their behalf and had kept them fully informed. In oral evidence, Mr Harjivan stated that the purchase of the shares in Glen and Teso had been suggested to him by Subhash on behalf of two of his clients whom he identified as Vijaya and Ramila; that Subhash had provided him with some financial and accounting documents relating to Glen and the debt owed by Glen; that, when he received the financial and accounting documents from Subhash, because he understood absolutely nothing about accounts, the first person he spoke to about these documents was Subhash; that the agreement for the sale and purchase of the shares was made following a telephone conversation between him and Subhash; and that Subhash was the person who informed him when he had made sufficient payments to complete his purchase of the companies.
226. This may be contrasted with Subhash's oral testimony at trial no. 1:

"MR BARKER: Paragraph 2^[84]. That is a correct summary of the position as it was in 1999, was before and still is, presumably, Mr Thakrar, is that right?

A. No, sir.

Q. What has changed?

A. It was, sir, at the time.

Q. What has changed since 1999?

A. The company has been sold by the family, as I said yesterday.

Q. When was it sold?

A. In the year 2000 as I recall.

Q. What point in the year 2000, do you recall?

A. I do not have all the details, as I said yesterday.

Q. To whom was it sold?

A. I think, sir, I did say that yesterday. It was sold to a Portuguese family living in Mozambique, as I have been advised.

Q. Did you act at all in this transaction of sale, do you know whether there were monies received on the sale and if so, where they went?

A. I gave my answer yesterday. I do not know anything about that."^[85]

227. Thus, in October 2003, Subhash stated on oath that the sale of Glen was simply something he had been told about but had no personal knowledge of. Now, in 2006, Mr Harjivan stated on oath that the person he dealt with in connection with the sale was Subhash, that he had had no direct dealings with the vendors and that his instructions as to when and how to pay the purchase price came from Subhash.
228. Mr Harjivan's confused evidence about the purchase price of £12 million. Mr Harjivan clearly had no idea how the alleged purchase price of £12 million was made up. As was apparent both from his written evidence, despite having been prepared by Subhash, and his oral evidence, Mr Harjivan was wholly confused as to whether Vijaya and Ramila were supposed to have owed monies to Glen and Teso or to have been owed monies by Glen and Teso. Equally, he was wholly confused as to whether his alleged payments were used to discharge the indebtedness of Glen and Teso to Vijaya and Ramila or the indebtedness of Glen and Teso to third Parties or the indebtedness of Vijaya and Ramila to third Parties or all of these things at the same time. The confusion is symptomatic of evidence that had been made up. Furthermore, it was so vague as to suggest that it was devised in an attempt to gloss over the total lack of any documentary support for Mr Harjivan's evidence and as a cover for the inability of Mr Harjivan or Subhash to identify any particular payments made or indebtedness repaid.
229. Implausibility of Mr Harjivan's Evidence about the Circumstances of the Share Purchase. The circumstances in which Mr Harjivan says he came to purchase the shares in Glen and Teso are inherently implausible. He accepted in evidence that he had had no direct contact with Vijaya or Ramila or lawyers acting for Vijaya and Ramila in relation to the alleged sale. He also accepted that he had been given limited information about either company prior to agreeing to purchase their shares. All he claimed to have been shown were some accounting papers relating to Glen. These could not have assisted him in his decision as to whether or not to purchase the company because he knew absolutely nothing about accounts. His decision was an investment decision to provide him with an income for his retirement. He was not a wealthy man and he was unable to provide any documents to establish that his business would have earned him, or could have provided the means of paying, the about £6 – £8 million of the purchase price that he stated that he had provided from his own resources over an eighteen-month period between 1998 and 2000.
230. His decision to purchase Glen for £12 million was based solely upon what Subhash told him and some discussions he had with "other accountants in Portugal" However, Mr Harjivan could not remember even the name of the accounting firm in Portugal he said that he had sought advice from nor the names of any of the two or three individual accountants he said he had dealt with. Indeed, having initially stated in evidence that the accountants he consulted were "the accountants I usually deal with my business and do my accounts for my business in Lisbon, in Portugal", upon being cross-examined to the effect that it was surprising that he could not remember the name of his regular accountants, Mr Harjivan promptly changed his story and said that in fact the accountants he consulted were different accountants. By the time he continued his evidence in October 2006, Mr Harjivan was able to come up with a name. However, this time it was to say that he had not in fact instructed a firm of accountants, but a retired accountant by the name of "Mr Cunha". He could give no further details of this retired accountant except his name which is one of the most common of Portuguese surnames.
231. Further, according to Mr Harjivan's oral testimony in July 2006, even his discussions with Subhash were limited. Apparently he had one telephone call with Subhash who sent him papers: "about some premium and some houses and also the debt that the company was owing". Once he had received these papers, Mr Harjivan, without more, made preparations to pay the money for the companies. Mr Harjivan changed that evidence substantially when he returned to continue his evidence. In his fourth witness statement, Mr Harjivan stated that he had only decided to purchase Glen and Teso after a series of meetings and telephone conversations with Subhash about their purchase and Subhash's advice and information played a crucial part in his decision to purchase these companies. When asked in cross-examination why he had not mentioned anything about this series of meetings and telephone conversations during his earlier evidence, all Mr Harjivan could say was that "these events were not fresh in my mind" at the time that he gave evidence in July, but "after that, I thought about it again and then all those events, all those facts, came back to mind".
232. Mr Harjivan's evidence also elaborated somewhat on the documents that Subhash had provided him with. He stated that Subhash had supplied him with "accounting documentation for the company", "details of the debts owed by the company together with details of the accumulated interest on those debts" and "a schedule setting out all of the properties owned by the company … with the values that Subhash had provided", and showed him all of this "in order that all of the information could be taken into account when arriving at a figure for the purchase of the company"; after being shown which Mr Harjivan "agreed to buy shares in the company for £12M; the company was Glen". However, that evidence was obviously made up because Mr Harjivan had no idea where the documents he had just referred to were and displayed no understanding or insight as to what might have become of them since, as he explained, the documents had no real meaning or significance for him. Thus:

"Q. Where are these documents now?

A. I do not know where they are, I do not remember.

Q. Are these not very important documents?

A. They were just information about the company, about the properties, about the accounting related to the company; nothing else.

Q. As I understand it, that was the very basis upon which you agreed to pay £12 million for the companies.

A. Yes.

Q. It was your proof that the companies were actually worth £12 million?

A. I talked to some people in Lisbon about this information which was given to me, and then just decided to carry on talking, to carry on discussing the possibility.

Q. So these were very important documents, were they not?

A. I do not remember that these documents were very important; they were information about the company and statistics which were drawn up by Subhash.

Q. Is it your evidence that it was not important to you whether these papers were right or wrong?

A. I believe that the information on these documents was correct because Subhash was a person who was regarded as trustworthy and who had a high standing in the Indian community in London.

Q. So you agree with me that it was important that these documents should be correct?

A. Yes.

Q. They were important documents?

A. Yes.

Q. Surely you would have kept them in safe keeping somewhere?

A. I did not keep them, I do not know where they are, I did not keep them. I do not usually keep documents.

Q. When do you think you disposed of them?

A. I do not know whether I threw them away or whether I disposed of them or whether I have lost them, I do not remember."

233. Improbability of the evidence as to the accounting documents seen prior to agreement to purchase. It is inconceivable that a business man seeking to provide for his retirement would have agreed to pay £12 million for a company based on the information Mr Harjivan claims to have been provided with. The only accounting documents of Glen that Mr Harjivan could have been shown by Subhash were accounts of Glen prepared prior to Mr Harjivan's agreement to purchase the shares in Glen and the commencement of the payment of the purchase price in 1999. The accounts of Glen for the year ended 30 June 1997 show "creditors" standing at £3,185,057 and "overseas loan accounts" standing at £2,907,588. Glen failed to disclose accounts for 1998 or 1999. However, from the accounts for the year ended 31 March 2000 it appears that as at 31 March 1999 "creditors" stood at £4,184,577. The breakdown as between "overseas loan accounts" and mortgage accounts is missing, but even assuming the figure for mortgage accounts remained more or less the same as for 1997, the "overseas loan accounts" would have grown to no more than £3.8 million. Neither the 1997 figure nor the 1999 figure supports a purchase price of £12 million.
234. In cross-examination on 9 October 2006 about the accounting documents Mr Harjivan says he was shown by Subhash, Mr Harjivan answered that he could not remember being shown the balance sheet of Glen but did remember being shown the profit and loss account of Glen. However, all the profit and loss account of Glen for the year ended 30 June 1997 would have shown him was that the company had made a modest profit of £179,676 during the year but was carrying forward accumulated losses of £439,310. The position as at 31 March 1999 was that the company still had an adverse balance on profit and loss account of £253,889. By no stretch of the imagination could a company reasonably be valued at a price of £12 million on the basis of those figures.
235. Not having been able to produce any of the documents that he said Subhash had shown him, and having been taken to the accounting documents of Glen that did not support or justify the alleged purchase price of £12 million, Mr Harjivan arrived at the remarkable conclusion that his decision to spend £12 million of Glen "was taken purely on the basis of [his] trust of Subhash", so that in fact he had not needed to see any documentation about the companies before deciding to purchase Glen and Teso. This evidence was given after Mr Harjivan had previously stated in evidence that Subhash was some one he hardly knew and with whom he did not have a close relationship or even what could be called a relationship at all.
236. Contract for sale. According to Mr Harjivan, there was no written agreement for the purchase of the shares in Glen and Teso, no instruction of solicitors by either vendor or purchaser to give advice or draw up the necessary documents in connection with the share sale, no warranties were given by the vendor to the purchaser concerning the accuracy of the financial or accounting information provided and no due diligence enquiries were made about either company. In other words, all the usual ingredients of a genuine share sale and purchase were absent.
237. Payments made by Mr Harjivan. Mr Harjivan was unable to produce any bank or other records of any of the payments he claimed to have paid out or any of the loans he claimed to have obtained in order to pay a total consideration of £12 million. Mr Harjivan's explanation for this absence of documentation, namely that one of his three brothers "just probably threw the papers away", is implausible and was precisely the same excuse he gave for not having any record of the repayment in October 2005 of an alleged loan he had been given by "friends of his" in order to make a £1.6 million investment in a project in India in October 2003^[86].
238. Mr Harjivan could give no explanation as to why he had borrowed the amount of money to purchase the shares that he said he did, when according to other evidence given by him, he had only just sold his factory and business in Mozambique in 1997 for a total consideration of £½ million.
239. Mr Harjivan's evidence that he did not keep any record of the payments he had made but, instead that he had just kept on paying what he was told to pay via "small papers" until Subhash told him he had paid enough is, incredible. Mr Harjivan's evidence about his business suggested that it was a small outlet involved in the garment industry and it is inconceivable that such a businessman would have been prepared to conduct business in this way. Furthermore, Mr Harjivan was unable to produce even one example of the "small papers" to which he referred.
240. Mr Harjivan was unable to produce any documentary evidence, or to give any of the following details of his evidence, as to how he raised and paid the alleged purchase price of £12 million. This absence of supporting evidence covered a wide field including:

(1) The name of any individual or company who owed him money in 1999 or 2000 which he called in and used towards the purchase price;

(2) The addresses of any such persons other than the countries in which they were supposed to reside;

(3) The amount of any particular sum owed to him in 1999 or 2000 by any such person;

(4) The name of any individual whom he contacted as an intermediary to arrange for money owed to him to be used to pay the purchase price;

(5) the name of any individual to whom he paid money as an intermediary who would arrange for a reciprocal payment to be made in the country of destination as part of the purchase price;

(6) The amount of any sum he had ever paid such person;

(7) The name of any company or individual from whom he had borrowed money to make the payments towards the purchase price;

(8) The addresses of any such persons other than the countries in which they were supposed to reside;

(9) The amount of any particular sum lent to him in 1999 or 2000 by any such person or the terms of the loan or the rate of interest; and

(10) The dates or amounts of any repayments by him of the monies he had borrowed.

241. In short, Mr Harjivan could not give any details of any particular occasion when he had made or had caused to be made any payment in the general manner that he contended for in his evidence. This absence of details extended to names, addresses, dates, locations, amounts, nature of debts, method of transfer of funds, terms of loans, banks involved and methods of evading currency and other restrictions.
242. Mr Harjivan's relative impecuniosity could not have supported the borrowings he alleged that he had made. Mr Harjivan confirmed that when he said that he had raised about 60% to 70% of the purchase price from money owed to him by companies overseas, he was referring to the commissions that he was owed for arranging business deals. However, as his evidence was that his rate of commission varied between 3% and 5% depending on the deal, this meant that he must have arranged some £200 million worth of deals between 1999 and 2000 in order to earn commissions totalling 60% to 70% of the purchase price since that part of the purchase price would have been between £7.2 - £8.4 million. Mr Harjivan could not "remember the numbers" but simply asserted that "there were a lot of businesses I made and I got lots of commission". From a man who produced no documentary evidence whatsoever of his earnings or income from any stage of his working life, Mr Harjivan's bare assertion that he turned over £200 million worth of deals in two years appears fanciful.
243. Mr Harjivan also alleged in cross-examination on 9 October 2006 that, as to the loans he had taken out to pay the balance of the purchase price of about £4 million, he had repaid the same between one and three years previously, from "commissions which were still owed to me". However, that evidence was contradicted by Mr Harjivan's own witness statement that he prepared just before resuming his evidence in October that "I have been completely retired for three or four years" and "I no longer take part in any overseas funding arrangements as I did previously when I was in business. There are no longer individuals who owe me money as they used to when I was directly involved in my own business projects".
244. Mr Harjivan's credibility was equally not assisted by his evidence that, at the same time as he was apparently borrowing millions of pounds from those he described as his "friends" to pay the purchase price of Glen and Teso, he was also lending money to others, which was thus available to him later when he needed to repay his "friends".
245. The £12 million consideration for Glen and Teso. Mr Harjivan's evidence was that he agreed to pay to Glen and Teso's shareholders £12 million as the purchase price for the shares in those companies. He had agreed this price with Subhash as being the amount of money inclusive of interest that was owed by Glen and Teso to its shareholders. This figure for the outstanding indebtedness to Glen and Teso's shareholders only first came into being long after the event of the alleged sale in December 2005 when Subhash was asked to assist Mr Shelton and Mr Barby to prepare the affidavits ordered by the court and the Points of Defence of Glen and Teso. For that purpose, Mr Narinder Sanghera, an employee of SKTL and previously an employee of SKT, prepared a schedule of the debt alleged to be owed by Glen to its owner that was then exhibited by Mr Barby to his second witness statement.^[87] Unlike the accounts of Glen, this schedule prepared by Mr Sanghera included "rolled-up" interest on the outstanding loans. There was no apparent reason for using compound interest for the first time. Mr Harjivan's case was that he paid the sum of £12 million over a period of 1½ - 2 years in 1999 and 2000. The mid-point of that two-year period is 31 December 1999. If one looks on Mr Sanghera's schedule for the cumulative debt figure stated to have been due on 31 December 1999, one sees the figure of £12,079,155.47. That would seem to match the alleged purchase price which Mr Harjivan said he had actually paid in 1999-2000.
246. However, December 2005 was the first time that a figure of £12 million appeared as the amount of the shareholder's loans allegedly owed by Glen to its owner. Indebtedness of this amount had not featured earlier, particularly at the time when Mr Harjivan said that he had paid the purchase price. This can be seen from the evidence produced by Subhash himself. In the course of earlier legal proceedings in November 2001, Glen was required by the court to produce a letter of confirmation of the total debt secured by the Teso charge^[88]. For that purpose Subhash faxed to Mr Laffoley of Glen "calculations of the outstanding Glen loans with interest added to 30 September 2002 and still accruing". According to these calculations, the cumulative debt figure as at 31 December 1999, including compound interest, was £7,211,821.51. Yet at the time this figure was produced, according to the case now put forward by Subhash and Mr Harjivan, Mr Harjivan had allegedly already purchased Glen by completing payments totalling £12 million to discharge the outstanding shareholder's loans. The figure for the purchase price of £12 million is, therefore, clearly a subsequent invention. Indeed, there is no evidence in any of the documents that have emanated from Glen or in any of its accounts as to what size any particular loan was, when these loans were advanced, what their purpose was, to what use the money loaned was put and how the shareholder obtained the loans in the first place. The fact that the precise figure representing the outstanding loans in 2000 was only first produced in December 2005 and that there is no evidence about the loans both cast serious doubt as to whether there had ever been any sale of Glen's shares to Mr Harjivan.
247. No reference to the purchase price or the extinction of indebtedness. There is no mention of the purchase price of Glen and Teso or of the extinction of indebtedness in any documents contemporaneous to 1999 or 2000 of which disclosure has been given by the Parties, not even in documents saved on the hard discs of the computers recovered from the offices of SKT.
248. Similarity with Subhash's Jagani lies. An alleged undocumented and unsubstantiated sale between families overseas of substantial property assets situated in the United Kingdom was one that Subhash had used previously and dishonestly used in order to explain how properties allegedly purchased from SPC by Jagani had ended up in the name of Ramila. The alleged sale between Vijaya and Mr Harjivan therefore has all the appearance of being a convenient fiction that Subhash sought and continues to seek to employ again. There would appear to have been no reality in there having been a sale of the shares in Glen and Teso to Mr Harjivan just as there was no reality in there having been a sale of the five properties by Jagani to Ramila.
249. Mr Harjivan's lack of drawings out of Glen despite his impoverishment. Despite allegedly having become the owner of Glen and Teso in 2000, and having had to pay or raise some £12 million to that end, Mr Harjivan has drawn nothing, and has not sought to draw anything, from his companies over the last seven years since then, either by way of dividend payments or of repayments of his substantial alleged shareholder's loan even though he says his financial position is such that, independently of the assets of Glen, he could not even afford legal representation at the trial no. 2.^[89]
250. Further, when Mitesh required £10,000 in July 2000, apparently to open a business, he had to approach Subhash who was described in the documents relating to this loan as his uncle, rather than obtain it from his own father. Again, in May 2001, when money was required for his children for the purpose, according to Mr Harjivan, to expand the shops and buy goods, Mr Harjivan could not provide the funds out of his own resources but had to approach Subhash to see whether he could raise the funds by way of a mortgage from a lending institution in England.
251. Mr Harjivan's explanation for seeking relatively small sums by way of loan from or with the assistance of Subhash when he was the owner of a company with a property portfolio worth many millions of pounds was that he did not want to touch Glen's money because there were lots of investments which had to be done in order to develop the businesses of Glen and Teso. However, when asked why in that case he did not offer some of the properties of Glen as security for a loan to his children, Mr Harjivan could only say that he did not remember. A further feature of this improbable explanation for the apparent improbability of Mr Harjivan owning such a valuable asset is shown by the fact that his loan application, supported only by the security Mr Harjivan and his children were able to provide, was declined owing to inadequate security being offered and Mr Harjivan apparently decided not to obtain alternative funding notwithstanding his apparent ability to obtain huge unsecured loans from family members and members of his community at will when he needed money in relation to Subhash business.^[90]
252. A further indication that Mr Harjivan was lying about his ownership of Glen arose when two different parts of his evidence were compared. The first part of this evidence was Mr Harjivan's factually correct statement that Glen had not repaid any of the alleged shareholder's loans. This fact was, however, wholly at odds with what Mr Harjivan said when trying to explain how he was able to repay the monies he had originally borrowed in order to pay the purchase price of Glen and Teso. These loans were repaid, he contended, by his taking further loans from yet other unnamed lenders using his shareholding in Glen as security. His evidence was as follows:

"so I asked money – I lend money from various people I trusted and obviously after that the company's shares started – the value of the shares increased, and of course it became much, much easier for us to repay the debt then" (emphasis added)^[91].

253. Harjivan's lack of knowledge about significant facts about Glen. Despite allegedly having been the owner of Glen for some six years at the time he gave evidence, Mr Harjivan knew virtually nothing about what Glen owned or what it did when asked about it. A further example of Mr Harjivan's ignorance about the company which he claimed to be the sole owner of occurred in 2005 when Mr Barby was ordered by the court to file and serve an affidavit disclosing the detail of Teso's assets. Mr Barby had to go straight to Subhash and he prepared the required information from a schedule provided to him by Subhash even though he had personally met with Mr Harjivan for the first time just over three weeks previously on the occasion of Subhash's daughter's wedding for "due diligence" purposes connected with Mr Barby taking over management of Teso. Clearly, it would have been expected that Mr Barby would have consulted Mr Harjivan about Glen's assets when preparing a court-ordered document yet it appears not to have occurred to Mr Barby to ask Mr Harjivan for information about the assets of the company of which Mr Harjivan was supposedly the sole owner^[92].
254. Not only that, but Mr Harjivan retained no file relating to Glen nor any documents sent to him by Glen at his home in Lisbon. The explanation given by Mr Harjivan in his exchange with me was as follows:

"Q. If a fax came to you in Lisbon, did you just throw it in the waste paper basket each time?

A. I kept it as long as it was necessary for me to think about them. Once I had dealt with them I would either throw them away, or if they were particularly important I would keep them."^[93]

However, Mr Harjivan was unable to produce even one example of a "particularly important" document he had received from Glen or Teso.

255. Mr Harjivan could give no real or plausible explanation as to why he had thought it necessary in June 2001 to confer a general power of attorney upon a person who was, as he saw the situation, no more than Glen's accountant. This was so even though Mr Harjivan was fully aware that he did not need to give a power of attorney to a firm of accountants simply to appoint them as his or his company's accountants, because he had already appointed accountants for his business in Lisbon without it being considered necessary to grant them also a power of attorney and also because he was adamant that only Mr Shelton could decide matters affecting Glen because he was a director and Subhash was not. It followed that Mr Harjivan, on his view of Subhash's role, had no need to grant a power of attorney to Subhash and that in reality, Subhash was taking a power of attorney from someone with nominal powers of management in order to allow himself to act as the real owner of Glen.
256. Harjivan's conflicting evidence about ownership of Glen and Teso's shares. Mr Harjivan's evidence as to the ownership of the shares in Glen and Teso was self-contradictory, shifting, and inconsistent with other available evidence:

(1) In his Points of Defence, Mr Harjivan stated that he had been the registered and beneficial owner of all shares in Glen and Teso since 1999 or 2000 and he signed a statement of his belief as to the truth of those facts on 15 June 2006.

(2) When giving evidence, Mr Harjivan stated that he did not own and had never owned any shares in Teso and had never had any interest or involvement in Teso.^[94]

(3) In a further answer he said that Teso was an "independent company" and "linked to another group".^[95]

(4) In answer to another question, Mr Harjivan initially stated that he did not purchase the shares in Teso but later said that Teso was owned by Thornbridge which was a company owned by his son Mitesh.^[96] Asked about the contradiction with what he had said in his Points of Defence, Mr Harjivan answered: "It was the easiest way to present the situation, because it is the family business", thus contradicting what he had earlier said in evidence in answer to questions from me (see (2) above).^[97]

(5) In cross-examination by counsel for Party 2 Mr Harjivan said that at some point, being "more or less 2004 but I am not sure", he spoke to Barby to transfer his shares in Teso to his son Mitesh because he was unwell and could not take care of his business. He had no documentary evidence of the transfer because all the documents were with Barby.^[98]

(6) The available, contemporaneous, documentary evidence suggests that it was Subhash who drafted a letter for Vijaya dated 24 September 2004 to direct Anchor Trust to transfer her shares in Teso to an unnamed person. Four days later, on 28 September 2004, the nominee shareholders of Teso, being Anchor Management Limited and Anchor Management Services Limited, resolved to cancel the declarations of trust given by each of them in favour of Vijaya. The notes of cancellation refer to the cancellation as being "confirmed by letter dated 24^th September 2004".

(7) According to Mr Barby and Mr Shelton, being the current and former directors of Teso, from 28 September 2004 Anchor Management Limited and Anchor Management Services Limited held their shares in Teso on trust for Thornbridge, the sole issued share in which was held by a nominee shareholder, Balchan Nominees Limited, subject to a declaration of trust in favour of Mitesh, who in turn held his interest in Thornbridge on trust for his father Mr Harjivan.

257. Harjivan's lack of knowledge of Mrs Bhatt. Mr Harjivan alleged in oral testimony that he had appointed Mrs Avni Bhatt as a director of Glen on the recommendation of Mr Shelton.^[99] However, it is plain from the balance of the evidence that Mrs Bhatt was an acquaintance of Subhash and that he arranged for her appointment. Thus:

(1) According to Mr Harjivan's original oral evidence, all he was told by Mr Shelton about Mrs Bhatt was that she worked for a bank in Africa and that Mr Shelton did not know anything else about her.^[100]

(2) Subhash was Mrs Bhatt's attorney under powers of attorney dated 2 September 2004 and 10 January 2005.

(3) The letter by which Mr Harjivan purportedly appointed Mrs Bhatt as a director of Glen was in fact written in English by Subhash. Despite the fact that that letter was only written just over a year before Mr Harjivan gave his evidence, Mr Harjivan had no recollection of what it said or of having sent it to Mr Shelton.^[101]

(4) When later giving evidence, Mr Harjivan conceded that Mrs Bhatt was appointed after Subhash had had a conversation with him in which Subhash had said to him that "it was a good idea to appoint her", and that he had never met or even spoken to her himself.^[102]

258. Harjivan's reliance on documents forged by Subhash. Mr Harjivan sought to rely on two letters to Mr Shelton dated 6 and 9 December 2000 that purported to come from, and to have been signed by, Vijaya and Ramila respectively and which he exhibited to his second witness statement dated 6 September 2006. These letters, he contended, evidenced the instructions by these two sisters that they had given to Mr Shelton to arrange for their shares in Glen to be registered in the name of Mr Harjivan because according to Mr Harjivan, received "substantial shares consideration overseas", ^[103] they had. However, it is clear, and I have found, that these two letters were forgeries, probably executed by Subhash. Thus:

(1) Vijaya's evidence was that the signature on the letter dated 6 December 2000 was not hers, that she did not send the letter, that she had never met Mr Harjivan, that she had never met or spoken to Mr Shelton, that neither she nor her family had ever received any monies from Mr Harjivan or any one on his behalf and that, contrary to what was stated in the letter of 9 December 2000, she had not requested Ramila to transfer one share held by her to Mr Harjivan.^[104]

(2) Ramila's evidence was that the signature on the letter of 9 December 2000 was not hers, that she had no knowledge of Glen or of her being or supposedly being the legal or beneficial owner of shares in Glen and that she did not know anything about the sale of the shares in Glen to Mr Harjivan.^[105]

(3) It emerged from Mr Harjivan's cross-examination that he had not seen or been sent by Vijaya or Ramila or Mr Shelton copies of these letters at the time they were purportedly written in December 2000 but had only been given copies of them by Subhash in connection with the present proceedings in 2005 or 2006.^[106]

(4) Although the history of the dealings or purported dealings in the shares in Glen is confused, to put it mildly,^[107] a date of December 2000 for the transfer of the shares in Vijaya's and Ramila's names to Mr Harjivan is not corroborated or shared by any other documentary evidence or oral testimony and is inconsistent with such documentary and oral evidence as there is.

7.3.2.3 Incredible Nature of Mr Harjivan's Evidence about the Harjivan/Thakrar Indian investment.

259. Mr Harjivan's inability to recall any details of both substantial sale and purchase and lending and borrowing transactions worth millions of pounds in which he claimed to have participated and his further inability to produce any or any genuine supporting documentary evidence for any of these transactions also severely undermines his credibility. A particularly glaring example of what I find was a non-existent transaction about which Mr Harjivan and the Thakrar family all gave dishonest and lying evidence related to Mr Harjivan's claim that in or about October 2003 he invested £1.6 million in a project in India through a firm of estate agents called Nilesh Exim for which purpose he borrowed £500,000 on a two-year loan which he repaid in or about October 2005. In support of that claim, on the last day of his evidence, Mr Harjivan produced a letter that he said he had asked Jagdish Tanna of Nilesh Exim to write concerning the project.^[108]
260. In answer to questions in cross-examination, Mr Harjivan's evidence was that:

(1) He did not have a copy of the contract under the terms of which he had made his alleged investment.

(2) He could not remember whether he had signed the contract or not, because "it was done internally".

(3) The "contract" "was just one sheet of paper with a general outline of the investment", which stated that "it was an investment in construction of housing premises – buildings for housing and buildings for commerce".

(4) Notwithstanding the apparent informality of this document, Mr Harjivan also maintained that it contained a confidentiality clause.

(5) Though Mr Harjivan had met with Tanna, who showed him the "contract", he did not meet with any of the other investors in the project, they were not named in the "contract" and Tanna did not tell him anything about them other than that they were "some people who worked for the government who did not want their names to be disclosed".

(6) Though Mr Harjivan accepted that Nilesh Exim was not itself the company doing the investment, because the letter Mr Harjivan had produced to the court referred to a "consortium company" as doing the development), he did not know what the name of this company was.

(7) Mr Harjivan's explanation as to why he did not have the name of the company was confusing:

(i) "Once the project has been approved then [1]expect to have the name of the company or the name of the company will be created";

(ii) It later transpired from Mr Harjivan's evidence that the company itself had not yet been created but that there was a study for the setting up of the company that had been going on for about a year. However, Mr Harjivan could not provide any details of what had happened between the making of the investment in 2003 and the setting up of the study in 2005 "because I have not been to India lately in these years".

(8) Mr Harjivan accepted a suggestion in cross-examination that the project was "just at the planning stage at the moment".

(9) Mr Harjivan appeared to exhibit no concern that he had committed millions of pounds to a project that still, after three years, he had never seen, he had never received a written report on and all he had been told about it was that "the whole process was going slowly". Mr Harjivan's evidence was that he did not mind £1.6 million of his money being locked up in a project that had done nothing for three years, and he was sufficiently indifferent about that that he had not bothered inspecting it for himself even though he had travelled to India in May or June 2006.

(10) Mr Harjivan said that he had borrowed the £500,000 in India from friends of his but he could not give their names and did not have anything in his possession that showed that the loan was made.

(11) According to Mr Harjivan, the loan had been made to him at "a minimum interest … in order to help" him, but he could not remember what the rate of interest was.

(12) When asked where he got the money to repay the £500,000 loan, Mr Harjivan answered:

"Other companies owed him money in Africa, in other countries where he did business, and the monies which were owed to him were paid to him and then he was able to repay that".

When asked about this later in his evidence, Mr Harjivan answered:

"It came from South Africa and Mozambique … Part of it was money I had, and part of it related to business. I had money which was owed to me because of business that we carried on."

(13) However, Mr Harjivan could not point to any document which showed what these companies were or how much they paid and did not even know what the names of these companies were. He could not produce any of the "small pieces of paper" used under the "chitty system" to make the alleged repayments and he did not believe anybody else had his chitties either. He said that he did not write any of the chitties himself but "just asked people to do it on his behalf, via the phone". However, he could not remember the names of any of the persons he had asked to make out the chitties. Further, according to Mr Harjivan, he did not make these telephone calls from his own landline but used an outside telephone box.

(14) Mr Harjivan's explanation was also inconsistent with the witness statement he had only just served in the action in which he stated in unambiguous terms that he:

"… no longer [took] part in any overseas funding arrangements as I did previously when I was in business. There are no longer individuals who owe me money as they used to when I was actively involved in my own business projects."

(15) Mr Harjivan maintained that he was unable to produce any documents evidencing the repayment because they had been destroyed by one of his brothers following a fall out. However, Mr Harjivan was quite unable to specify when the supposed fall out occurred, to provide a consistent explanation of the circumstances in which it occurred or to specify what was its cause.

(16) Mr Harjivan said that the balance of the money required in 2003 for the investment in the Indian project came from money that he had in Africa, in South Africa and in Mozambique but, again, he did not know the names of any of the companies in these countries that were supposed to have owed him such money.^[109]

261. This evidence was so far-fetched as to be incapable of belief. It was particularly far-fetched for Mr Harjivan to suggest that it was credible that he had personal resources of £2 million in 2003 from which he was able to make an personal investment in the Indian project and as well as being able to provide a loan to the Thakrar family so they could also invest in the project. This suggestion related to a man whose personal financial circumstances were such that, according to him, in 1999 and 2000 he had had to take out loans to pay the bulk of the purchase price of £12 million for his shares in Glen and Teso. It also related to a man who, in 2001, had been unable to give or lend his children £90,000 in order for them to repay their existing loans and to have some funds to re-equip their shops and who in consequence had had to approach Subhash in an unsuccessful attempt to get him to raise the money in England.^[110]

7.3.3 Dishonest Witness

7.3.3.1 Introduction

262. Mr Harjivan was a wholly unreliable witness in that he had been proved to have lied on numerous occasions before and during the trial and had been schooled in what to say by Subhash, both before and after he appeared in court to give evidence in July 2006.

7.3.3.2 Points of Defence

263. Mr Harjivan was dishonest in the evidence he gave as to how he prepared his points of defence dated 15 June 2006. When he first gave evidence, Mr Harjivan's evidence consisted of a complete denial that Subhash had had anything to do with the preparation of this document. At that stage, Mr Harjivan was unrepresented. However, once legal assistance, including the assistance of counsel, was provided to Mr Harjivan by order of the court, with an associated order that that representation should be funded out of Glen's resources, Mr Harjivan served a further witness statement which contained the frank admission that Subhash had in fact written the points of defence in their entirety. Mr Harjivan suggested, by way of explanation for his erroneous evidence, that he had prepared it when he was completely on his own save for the assistance given to him in Lisbon by his daughter who was both an English speaker and a Portuguese lawyer practising Portuguese law in Lisbon.
264. This was a very significant admission since Mr Harjivan's original denial that Subhash had had anything to do with the contents of the points of defence was doggedly repeated at length and through a Portuguese interpreter when he initially gave evidence. Mr Harjivan did, however, continue to contend that the substance of his evidence and of the points of defence was correct. The points of defence was a very long document which was written in good English. It amounted to a combination of a pleading setting out Mr Harjivan's defence, a full witness statement of his supporting evidence and a submission. Thus, the entirety of the incredible explanation of how Mr Harjivan came to be the beneficial owner of the entirety of Glen and Teso's shares had been drafted by Subhash and Mr Harjivan's evidence amounted to a repetition and confirmation of this explanation in the witness box. His lies as to how the statement had been drafted and his denial of Subhash's involvement in that drafting process could only have been both deliberate and calculated. They were only withdrawn after Mr Harjivan had been advised by experienced counsel and an experienced litigator when helping him to draft the further witness statement that retracted his first explanation of how the points of defence had been prepared.
265. My finding that Mr Harjivan's original evidence had not been given by mistake or under a misapprehension can be seen from these stark and clear statements of Mr Harjivan as to how the original document was prepared. The questioning was by me and was necessitated by the absence of any supporting documentation for any material part of his evidence and by the fact that Mr Harjivan was unrepresented at that stage. It was therefore necessary to question Mr Harjivan at some length in chief in a non-leading manner in order to get him to explain the context in which his evidence should be set and how the evidence was prepared. The relevant passages of his evidence read as follows:

"Q. Can you tell me how you prepared your statement and the Points of Defence?

A. These Points of defence were made in Lisbon. My daughter helped me, with a group of solicitors in Lisbon. The basis, the principal basis, in London was made with the help with my attorney, because she is also – she is also the accountant and would be able to help me with the papers.

Q. Who prepared the English in the document?

A. It was my daughter. We started doing – raising the points and doing the documents in Portuguese, and after that we had it translated for English.

Q. Who translated it?

A. It was my daughter and the group of solicitors working with her.

…

Q. There are 38 pages of the Points of defence. Where were those typed up?

A. It was typed up in Lisbon.

Q. By Mr Harjivan's daughter?

A. Yes. She typed it but she had the help of a group of solicitors working with her.

…

Q. The documents are long and written in English. What did you do to check that the English document is true and was the evidence that you wished to give?

…

A. What I did was, a draft of the document was written in Portuguese first and after I read the document and after that I said, yes, this is correct and this is what I would like to be pointed.

Q. When the English document was produced, what does Mr Harjivan say to show that he believes the English document is a fair and correct translation of the document that he agreed to?

…

A. I have a notion of the English language, so I have no doubt that these documents are fairly translated from the Portuguese documents."^[111]

266. This evidence suggests that Mr Harjivan's understanding of English was good. His evidence as to his "notion of the English Language" shows that he accepted that he could understand English reasonably well since, otherwise, he could not have understood the points of defence. This conclusion is supported by Mr Shelton's evidence that he never had any difficulty in both communicating with, and understanding, Mr Harjivan in English since Mr Shelton does not speak Portuguese. This conclusion provides support for my finding that Mr Harjivan was not confused when initially giving his evidence.
267. When initially cross-examined about the provenance of his points of defence, it was put to Mr Harjivan that a fair summary of the evidence he was giving was:

(1) The Portuguese document that Mr Harjivan had with him in the witness box was a copy of his original Points of defence in Portuguese.

(2) The original points of defence had been written in Portuguese.

(3) The points of defence served by Mr Harjivan and copied into the trial bundles was a translation of an original points of defence written in Portuguese.

(4) The original points of defence had been drafted in Lisbon or drafted by any one other than Subhash. Mr Harjivan was adamant when responding to these questions that Subhash and SKT Ltd had played no part in the preparation of his points of defence.

268. Thus:

"Q. Just to confirm, Mr Harjivan: is your evidence that the defence in English was drafted for you by S K Thakrar Limited?

A. No, it was not by them, we just used their own summary of events because we did not have the documents with us, so we prepared our own documents from their own summary.

Q. Let me put it this way, Mr Harjivan: it is right, is it not, that this document was prepared on your behalf with the assistance of S K Thakrar Limited?

A. No, the S K Thakrar just helped us to gather the documents that we needed to prepare our defence in Portugal because we did not know the laws in England. We needed information from them so we can gather the information to prepare the Defence in Portugal^[112]."

269. Then, in his third witness statement, Mr Harjivan completely reversed his story and stated that:

(1) The original points of defence had been written in English.

(2) The points of defence served by Mr Harjivan and copied into the trial bundles were the original Points of defence.

(3) The original points of defence had been drafted and typed up at the offices of SKTL in London.

(4) Subhash had substantially composed the whole of the points of defence and had personally written them out in longhand for Mr Harjivan and for typing.

270. Moreover, Mr Harjivan revealed when being cross-examined that he had no knowledge of much of the detail adduced in evidence by him that was contained in the points of defence document and which he had confirmed as being true in the witness box. Thus:

"Q. Mr Harjivan, all the people I have referred to and the litigation I have just referred to, you deal with at length in your defence?

A. Yes, I can only remember about the names of the lawyers that were representing my own interests. I really do not remember any other names or only the lawyers I spoke to. I am only concerned with the process that has been going on against myself and my companies, because I have not been well lately and I cannot really be worried about things that happened in the past, or things that happened that are not of matter to myself.

Q. So, although the people and the litigation are referred to in your defence, the people and the litigation I have just asked you about, you have no personal knowledge of any of them?

A. Yes, I just know about the contract we had from the lawyers in London regarding the process of transferring shares on my own companies. So these lawyers, the lawyers I spoke to in London I know about because we contacted them to get all the information, so at lease we could prepare our own process. Anything else, I really do not know about."^[113]

271. There is no excuse for these lies. Mr Harjivan sought to excuse them solely on the basis that he had, just before preparing the points of defence, lost the assistance of his English solicitors, Ross & Craig, who had come off the record due to non-payment of outstanding fees and of further money on account. However, whilst that may have been a reason for Mr Harjivan asking Subhash to help him prepare his points of defence, it was no justification at all for Mr Harjivan lying to the court that Subhash had not prepared it. Mr Harjivan was happy for the court and the Parties to proceed under the impression that the points of defence set out his case when he knew that he had little knowledge of that case and that the document only set out the case that Subhash wanted Mr Harjivan to put forward in Mr Harjivan's name.
272. I infer that Mr Harjivan was prepared to lie on oath that he was concerned with the preparation of his points of defence and that Subhash had no involvement in their preparation in order to distance himself from Subhash and to hide the fact that Subhash was directly involved in their preparation. This inference is supported by Mr Harjivan's attempts elsewhere in his evidence to portray his relationship with Subhash as a distant, commercial one^[114].

7.3.3.3 Vijaya's Alleged Use of Mr Harjivan's Mozambique Post Box.

273. Mr Harjivan also lied significantly in relation to the use of a post box in Mozambique namely PO Box 1127, Maputo. When Mr Harjivan and his son Mitesh each provided Subhash with a general power of attorney dated 22 June 2001, each provided as his address: "Maputo, Moçambique – postal code no. 1127". When originally asked about that address by counsel for Party 4 on 13 July 2006, Mr Harjivan insisted that this address had always been his and his alone. He stated:

"Q. One question: in 2002 and 2003, was that also, or possibly instead of you, the address of Vijaya?

A. No, I do not think so because this postal code has always been mine, and if I had any contact with her – I really do not understand.

Q. As far as you are concerned, the answer is "no"?

A. I did not understand completely the question, but what I am saying is this has always been my own postal code.

Q. Postal box?

A. Postal box, yes. My postal box, and if had any contact with her through it, I may have, but it always belonged to me.

Q. I did not ask whether you used it; I asked whether that was also her address as well as yours or instead of yours in 2002 and 2003.

A. No, it always belonged to me and no body else. As far as I have always known, this is my own postal box and it never belonged to anyone else; if it was transferred to given to anyone else, I do not know. As far as I know it has always been mine."^[115]

Moreover, when first giving evidence, Mr Harjivan had stated unequivocally that Subhash had "nothing to do with" this postal box.^[116]

274. However, when counsel for Party 4 asked Mr Harjivan on 3 October 2006 whether he shared that PO box address with any one, he replied:

"Yes … Subhash asked [me] – if any documents had to be sent to Vijaya in Mozambique, he asked the documents to be sent to the PO box … Because cheques were sent to her, she did not like the fact that cheques were being sent to her and then she asked the cheques to be sent to the PO box instead."^[117]

When counsel asked him why he had changed his story, Mr Harjivan said:

"At the time it was not clear to me what you were talking about. After we had the hearing at the court and I spoke to Subhash to find out what had happened, and then he explain to me that it had happened in this way and not in this other way."^[118]

275. Mr Harjivan also explained that it was Subhash who, in the week following Mr Harjivan first giving evidence and after Subhash had read a copy of the transcript of Day 8, initiated the conversation with Mr Harjivan and "explained" to Mr Harjivan "what was wrong in the transcription". Despite having changed his evidence, on Subhash's instructions, Mr Harjivan was unable to give any first-hand evidence that Vijaya had ever used the post box or that mail addressed to Vijaya was ever received at that post box. ^[119]
276. Mr Harjivan's recollection of his own use of the post box was hesitant and confused. From that evidence, it was clear that Mr Harjivan had not used this post box for some years before 2002, albeit that it had been his address when he was resident in Mozambique. He had also clearly left Mozambique for good long before 2002. There was, indeed, no evidence that it was still an active address for Mr Harjivan or for anyone else nominated by him. Finally, Mr Harjivan was unable to give any satisfactory explanation as to why he had provided Subhash with a general power of attorney at all or why he had given as his current address this dormant post box address on that power of attorney. What is clear, however, is that Mr Harjivan had no notion, when first giving evidence, that this address was, or should be presented as being, associated with Vijaya.
277. Taking all his evidence together, Mr Harjivan can be seen to have told the following lies:

(1) Subhash had had nothing to do with the post box.

(2) Mr Harjivan had always known of Vijaya's involvement with the post box but had failed to mention it originally because he was confused.

(3) Mr Harjivan had not sought to correct his answer about the post box at Subhash's request or suggestion.

(4) Mr Harjivan had always known that Vijaya had had an interest in the post box in 2002 because he had lent its use to her at Subhash's request in 2002. No such request was made by Subhash to Vijaya at that time.

278. It is worth reflecting why Mr Harjivan lied in these ways. The most obvious explanation is that his original answer that he did not share the post box with anyone else contradicted in a significant respect Subhash's case that post box 1127, Maputo, was Vijaya's only postal address in 2002 and 2003. This was the address that Subhash had given to the solicitor who he was instructing should take over acting for Vijaya in 2002 in the Family Action. That solicitor was Mr Simon Clark of Kotecha & Co. Subhash's instructions also included the information that Vijaya was permanently resident in Mozambique. Mr Clark was instructed by Subhash to send correspondence for the attention of Vijaya to this postal address.
279. When he gave these instructions to Mr Clark, Subhash lied in stating that he was acting for Vijaya as opposed to using her name for his own purposes, that Vijaya was a real rather than a nominal plaintiff in the claim being pursued, that she had a genuine claim against Party 4, that she lived in Mozambique in 2002 and that the PO box address he gave was her postal address. These lies were integral to Subhash's and the other Thakrar Family's dishonest conduct of the Family Action. They were also an integral part of his long-running dishonesty in relation to the ex-SPC properties and to the identity of the beneficial ownership of Glen and Teso.
280. Subhash would have been concerned that Mr Harjivan's original answers about this postal address could completely undermine all of these dishonest actions since Mr Harjivan's original evidence supported and corroborated Vijaya's evidence that she had had no involvement with the properties transferred into her name or with the shares she was said to own beneficially or with the action brought in her name to enforce her apparent rights of beneficial property ownership. It is therefore highly material that Subhash appears to have persuaded Mr Harjivan to change his evidence relating to Vijaya's involvement in the Mozambique post box. Subhash's and Mr Harjivan's actions in this respect support the conclusion that both were acting dishonestly in relation to their suggestion that Mr Harjivan was the beneficial owner of Glen and Teso's shares.

7.3.3.4 Mr Harjivan's Loan Application.

281. Mr Harjivan also demonstrated that he was quite prepared to participate in dishonest and fraudulent actions when it suited his purposes. The first particular example of this was the instance when he was prepared to lend his name to, and participate in, a dishonest and fraudulent loan application made by him and his children through Subhash in 2001 for the purposes of obtaining an advance of £90,000 from a commercial loan company in England. For this purpose, he represented that he was being paid "20.000" a year by a business of his son Mitesh called Mitesh Mahendra Unipersonal Partnership.
282. In fact, the truth was that his son had not paid Mr Harjivan anything and Mr Harjivan had received no income from the business. Mr Harjivan could give no explanation for his actions. It is not even clear that Mr Harjivan recognised the dishonesty of his actions:

"Q. … This document says that you are earning 22,000. That is false, is it not?

A. At this moment I cannot say whether this is false or true.

Q. Were you earning 22,000, or any money, as manager of Universal Partnership?

A. I do not know how to explain, how I will explain. This was a document which was prepared in order to apply for a loan to see whether they could be successful in the application, nothing else.

Q. But the person who saw the document had to decide whether to give you a loan and that person wanted accurate information. That person would see that you were earning 22,000 a year from the Partnership. If you were not earning money from the Partnership, the information that that person would see would be false. Does it concern you that false information was given to the person who had to decide whether to give you a loan?

A. I cannot give you an answer."^[120]

7.3.3.5 Unlawful Loan Transactions.

283. On his own evidence, Mr Harjivan stated that he was prepared to enter into loan arrangements that were unlawful transactions in Portugal or other jurisdictions where the loans were allegedly made. These loans to him were to enable him to provide 30 – 40% of the purchase price of £12m that he claimed to have paid Ramila and Vijaya for their shares in Glen. The evidence he gave about these loans is instructive. One of the crucial passages of this evidence was as follows:

"Q. … you say:

"The balance" [i.e. 30 – 40% of £12m] "was raised through personal loans provided on trust through my business associates in India and South Africa."

A. Yes.

Q. And you say:

"These were people who were at all well known to each other and where trust was very high between us".?

A. There was a lot of trust amongst us, so we could just tell each other how much money should be paid.

Q. So these are people you know well?

A. I do not know all of them, but some of them I know. I cannot give their names.

Q. I see. So some of these people who did not even know you lent you money, is that right?

A. I do not know all of them, but some of them I know. I cannot give you their names.

Q. I see. So some people who did not even know you lent you money, is that right?

A. Because amongst us there is a lot of trust and we all work with that kind of process. So people will tell each other: "Can you lend money" or "Will you please lend money to someone", and then they were a kind of society, because – Hindus, Hindus.

Q. Many of these people you know well, then?

A. I know them reasonably well. I do not know them very well, but reasonably well.

Q. But you cannot identify who they are.

A. I cannot give their names.

Q. Can you even remember who they were?

A. I do not remember, that is it.

Q. Can I ask, when Mr Harjivan says that the names are confidential, why is he unable to tell us the names because he says they are confidential?

A. Because most people who transfer money in that manner in Africa, they do not like to have their names divulged.

Q. Why not?

A. I do not know, but it is something to do with the development of their businesses.

Q. Is it anything to do with the fact that these are illegal transactions?

A. In most parts, the majority of times, yes." ^[121]

284. On his own evidence, therefore, Mr Harjivan was prepared to borrow huge sums of money without providing any security, interest, repayment obligations or written evidence for the loans from people he either did not know or was only acquainted with in the knowledge that these loans were unlawful transactions in both Portugal and all other legal systems governing them. As a result of this unlawfulness and apparent dishonesty, Mr Harjivan refused to name any of those whom he alleged had unlawfully lent him sums in excess of £3 – 4m to enable him, on his case, to purchase Vijaya's beneficial interest in Glen, an interest she did not have and a consideration which she never received.
285. This was an obvious and blatant example of Mr Harjivan's dishonesty either inbeing prepared to enter into such obviously dishonest transactions or in being prepared to lie and, in lying, to invent dishonesty in order to seek to obtain a beneficial interest in shares worth many millions of pounds to which he is not entitled. It was also a particularly glaring example of Mr Harjivan's inability to provide evidence that would corroborate his own evidence. Had he named the lenders, evidence from them could then have been sought and, if Mr Harjivan's evidence was correct, this third Party evidence would significantly corroborate his evidence. If, however, that evidence was at variance with Mr Harjivan's evidence, it would undermine if not destroy Mr Harjivan's case. Thus, Mr Harjivan's inability or refusal to provide the names of those he had borrowed money from strongly suggested that those lenders did not exist, that Mr Harjivan never borrowed the money at all and that his own evidence that he had borrowed this money was a lie.

7.3.3.6 Knowingly Assisting Subhash to Breach Freezing Order Over Glen's Assets.

286. The evidence now shows that Mr Harjivan agreed to the misuse of Glen's assets to pay contributions towards his solicitors' legal fees in April, May and June 2006 and that he lied to the court in July 2006 as to how he had provided funds to those solicitors. The payments to his then solicitors originated from an account held by Glen in London with the HSBC. This account was entirely under the control of Mukesh and Subhash and was used by them to receive rent payments and other similar income and the only people with authority to run the account were Mukesh and other members of the Thakrar family. Mr Shelton left this account entirely in the hands of the Thakrar family in London and it continued to be operated by Mukesh in breach of the terms of the 2005 freezing orders obtained by Party 1.
287. In all, £68,000 was paid out of the HSBC account to Mr Harjivan or to his order by Mukesh in this period in six separate payments. These payments were transferred into to Ross & Craig's client's account. In the case of the last five of these payments, they were first paid into an account operated by Subhash's wife or daughter or by Mr Harjivan's daughter. These payments were made as follows:

(1) A payment of £9,000 was paid directly from the HSBC account to Ross & Craig by Mukesh on or purportedly on Mr Harjivan's instructions on about 24 April 2006. This sum remains in Ross & Craig's client's account pending the outcome of this litigation following correspondence from Party 1 seeking repayment of that sum to Glen.

(2) Mr Harjivan stated in evidence that Ross & Craig informed him that it was not prepared to accept further monies or any other payment save by way of a cheque drawn on a personal account. No other evidence of this requirement was provided to the court. According to Mr Harjivan, this requirement necessitated further payments to be made from Glen into a personal account and from that account to Ross & Craig. In consequence, three separate payments were made from Glen's HSBC account into an account held by Kiran, for £5,000 on about 25 April 2006, and into an account held by Rishi, Subhash's son, for £9,000 on about 27 April 2006 and for £10,000 on about 4 May 2006. These sums were then transferred by Kiran and Rishi to Ross & Craig's client's account.

(3) Two further payments were also made from Glen's HSBC account into an English bank account held by Mr Harjivan's daughter for the same reasons. Mr Harjivan's daughter arranged for these two sums to be paid into Ross & Craig's client's account, the first for £15,000 on about 24 May 2006 and the second for £20,000 on about 13 June 2006.

288. On 11 September 2006, Mr Harjivan disclosed to the claiming Parties a copy of a letter that appeared to be a letter that he had addressed and sent to Mukesh dated 5 June 2006. The letter stated:

"Dear Mr Thakrar

I, as the beneficial and legal shareholder of Glen International limited and also, a director of Glen International limited, I confirm my various instructions to you to use monies from Glen International limited, the monies required to pay our solicitors.

They are namely Decherts, or Ross & Craig, solicitors and any other.

I confirm that you have acted on my instructions and this expenditure is in the normal course of our business to protect our best interests as the Court Orders allow. Therefore, you will not be in breach of any Orders and you have been following the clients' instructions which you are obliged to do.

If there is any argument, I shall deal with it personally as and when necessary. Please do not therefore be unduly concerned. I am sending a copy of this letter to Mr Barry Shelton, so he is aware of my various instruction (sic) on behalf of Glen International limited and myself as some of the monies will be debited to my own loan accounts. These loan accounts are with Glen International limited and Teso International Group limited, the lending company, which is my own also.

If you have any queries, please do not hesitate to contact me."

This letter is dated with a date that is later than the date on which each of the payments made out of Glen's account were paid out. It therefore provided, if at all, retrospective authority for those payments to be made.

289. On 8 June 2006, Ross & Craig ceased to act for Mr Harjivan having obtained the permission of the court to cease to act on the grounds that the firm had not been put in funds to enable it to continue to act for Mr Harjivan at the forthcoming trial no. 2.
290. In July 2006, Mr Harjivan was seeking from the court orders that would enable him to obtain funds to pay for his renewed legal representation from a Scott & Co. He had informed the court that he could not afford to instruct a lawyer in England and he had remained unrepresented following Ross & Craig ceasing to act. The court had indicated that it would direct Glen to provide funds for this purpose and to vary the freezing order to allow this but required Mr Harjivan first to disclose his means and the source of the funding that had allowed him to pay his previous solicitors. To that end, Mr Harjivan sent the court an e-mail, copied to all other Parties, on 22 July 2006 which stated:

"[I am pleased to note] that you will allow me to draw down funds from Glen and Teso, my and my family companies. This, I do need as my health is not good and I certainly need the support of my and my son's companies, their directors and other advisers to be able to deal with the matters properly.

I have paid Ross & Craig very substantial fees, which were my private savings also and I have run out of them with my having to also live as a retired man and having been overseas on various business, family and religious reasons."

291. On 28 July, the court directed that Mr Coney of counsel, instructed by Scott & Co, should represent Mr Harjivan funded out of funds to be provided by Glen. The court retained control on the limit of funds to be provided in this way. The court accepted Party 1's submission that such payments were not payments being made in the ordinary course of Glen's business but directed that the payments should none the less be made from Glen's funds. This direction was made on the basis that Mr Harjivan was entitled to a fair hearing of his case that he was the beneficial owner of Glen and Teso's shares and that Mr Harjivan should have access to legal assistance to ensure that his case was fully and fairly presented to the court. The only way this could be achieved was for him to be legally represented using funds provided by the company over which he claimed beneficially ownership and whose beneficial ownership was the principal issue to be resolved in the litigation.
292. On 9 October 2006, Mr Harjivan was questioned about his statement that he had paid Ross & Craig from his own private savings. He accepted that those payments had in fact been made by Glen and that he had instructed Subhash and Mukesh to arrange for these payments. He had, by the time he was questioned on 9 October 2006 about these payments, disclosed a copy of the letter that has already been set out which appears to have been dated 5 June 2006. The letter states that a copy of it was being sent to Mr Shelton; and Mr Harjivan stated in evidence that a copy had indeed been sent to him. Mr Shelton stated in evidence that he was unaware of the letter or its contents.
293. When further pressed, Mr Harjivan admitted that the e-mail sent to the court had been drafted by Subhash and then sent to him by email and that he could not himself explain why he erroneously stated, or rather why the e-mail drafted by Subhash and sent to him to send on to the court erroneously stated, that Ross & Craig had been paid out of Mr Harjivan's own funds. He went on to say that one of the payments made to Ross & Craig for £9,000 had been paid out of Glen's account with Mr Shelton's knowledge and, by inference, permission. This line of questioning followed evidence from Mr Shelton about this payment. Mr Shelton had denied all knowledge of it. When Mr Shelton's evidence was put to Mr Harjivan, he immediately retorted:

"A. I think Mr Shelton may have lied at that point for personal reasons, because he was also sent a £90,000 cheque to this same firm.

Q. 90,000?

A. 9,000, sorry.

Q. I am saying that Mr Shelton knew nothing about the money coming out of the HSBC account. That was his evidence. Was he lying?

A. I spoke to him on the phone. I spoke to him on the phone about the need for money to be paid, and if he said that he did not know about it, it is not my fault.

Q. You are aware, are you not, Mr Harjivan, that there is an injunction freezing Glen's assets and that its assets can only be used in the ordinary course of its business.

…

A. I did not know anything about the freezing order.

Q. The freezing order was made in 2005.

A. I did not know about it. No body said anything about that to me."

294. In the light of this evidence and the reasonable inferences made about it that arise when taking into account all the other evidence of Subhash, Mukesh and Mr Harjivan's dishonesty, I make the following findings:

(1) Subhash arranged for significant sums of money to be paid out of Glen's HSBC account which he still retained control of. Following his bankruptcy, the operation of this account was handed to Mukesh under Subhash's direction. Subhash knew that these particular payments were being made out of Glen's account in breach of the freezing order which he was also aware of. He also knew, or ought reasonably to have known, that such payments were not permitted by the exception contained within the freezing order for payments that were made in Glen's normal course of business since the funding of a director's defence to a claim made against the director personally was not within Glen's normal course of business.

(2) Mr Harjivan also knew of the terms of the freezing order and that these payments for his legal expenses were not permitted by that order.

(3) Both Mr Harjivan and Subhash became concerned that the court would discover that Mr Harjivan's legal representation had been funded out of Glen's resources in breach of the terms of the freezing order. To that end, they arranged for Subhash to draft a letter which would be produced if any question arose as to the legitimacy of these payments. That letter was signed by Mr Harjivan and kept by him for use, if necessary, as a means of justifying the obvious breach of the freezing order occasioned by the six payments out of Glen's account.

(4) Despite the payments, Ross & Craig ceased to act. Mr Harjivan then saw that his only means of obtaining legal representation was by means of a court order. He arranged for Subhash to draft the necessary application and supporting grounds and he and Subhash agreed that it would be necessary to hide from the court that Mr Harjivan's previous representation had been funded by Glen in breach of the terms of the freezing order. In those circumstances, the e-mail dishonestly stated that Mr Harjivan himself funded his previous representation out of his own resources. In fact, he had no resources from which he could have funded anything towards his own legal representation.

(5) Mr Harjivan would not have obtained an order for funding from Glen had the court been aware of his knowing assistance in the breaches of the terms of the freezing order that had led to nearly £70,000 of Glen's money being paid out to fund his outstanding indebtedness to Ross & Craig.

(6) Mr Harjivan was lying when stating that he had sent Mr Shelton a copy of his letter purportedly sent to Mukesh dated 5 June 2006, that Mr Shelton had authorised and/or arranged for the payment of the various sums out of Glen's account and when he stated that Mr Shelton was lying in asserting that he had not authorised or known about any of these payments.

295. Overall, this episode demonstrates the lengths that Mr Harjivan was prepared to go to support Subhash's dishonest behaviour, to mislead the court, to break court orders and to seek dishonestly to hide the fact that he had knowingly participated in such breaches.

7.3.3.7 Dishonest Disavowal of a Close Relationship with Subhash.

296. Harjivan's initial evidence. Until Mr Harjivan returned to the witness box for his second stint of evidence in October 2006, his evidence was to the effect that he hardly knew Subhash and only had a distant business relationship resulting solely from the purchase of Glen and Teso's shares from two clients of Subhash and from his subsequent appointment of Subhash to act as his and both Glen and Teso's accountant. This distant relationship was painted in a variety of ways in his evidence. By way of example:

(1) Mr Harjivan claimed first to have met Subhash at a funeral in Lisbon, being the funeral of Bhikhu in 1986. Mr Harjivan was a member of the same extended community of about 3,500 people of Indian origin living in Lisbon that Bhiku's family were members of and for that reason he had attended the funeral. Subhash and Ramila also attended the funeral and Mr Harjivan met Ramila for the first and only time until he would have seen her in court during trial number 2. He did not in fact meet Vijaya and has never since seen or met her. However, following that meeting, Mr Harjivan next met Subhash in Tenerife in the late 1980s, having probably met him no more than once or twice in the intervening period at parties or weddings in London.

(2) Mr Harjivan was not able to explain how and why he came to meet Subhash in Tenerife but at that meeting, the contract to sell him Vijaya's shares in Glen and Teso was effectively sealed. He stated:

"I met Mr Subhash in Tenerife and at this meeting I asked him of the possibilities of having some investments in London. At this time he was – yes, at this time he was the accountant for the Glen's group. At this time I asked him about the possibilities of doing an investment in London and he mentioned that one client of mine was interested in selling shares. Then I asked him to send me the proposal. He sent me all the elements for the business and he explained that the ladies wanted to sell the shares because they were facing some difficulties of making some payments of some debts contracted by them. From that point he gave me some numbers and with these numbers I studied let us say, these numbers and I tried to find at some point, at some time, to do this business in London. At this time he presented me the debts – the debts in other countries and it was approximately £12 millions." ^[122]

297. Apparently, having been sent some documents from London, and having had a telephone conversation with Subhash, the agreement was reached over the telephone for Mr Harjivan to buy all the shares in both companies for £12 million. This significant contract was entered into in this way:

"Q. But where was the agreement reached? Was it by telephone, in London, in Tenerife, Lisbon or where?

A. It was after telephone conversation, after that he send me the documents and I start preparing myself to pay the money."

The documents he referred to merely consisted, according to his evidence, of some accountancy papers which he has since lost. There were no formal, or even informal, contract documents and the contract was concluded orally over the telephone.

298. Furthermore, on his own evidence on this occasion, Mr Harjivan had had no personal contact with either of the alleged vendors, Vijaya or Ramila, save for a passing social introduction at Bhiku's funeral some years earlier, and no solicitors were involved for any Party. Mr Harjivan stated:

"Q. And that Mr Harjivan agreed with Subhash that if £12 million was paid, the Ramila and Vijaya shares would be transferred to him?

A. I did not agree with Mr Subhash. It was not with him, because he was the accountant of the company. I just asked him if the documents has been paid"^[123].

299. Mr Harjivan did not appear to have taken on board the fact that both "these two ladies" from whom he was buying the shares were Subhash's cousins because, in his evidence, no mention was made of this fact. Despite the informal nature of the contract and his subsequent payments (as he alleged) totalling £12 million, no share certificates were provided to Mr Harjivan and, indeed, no share certificates were ever issued by Glen in his name for the shares in that company that he stated that he had bought.
300. Mr Harjivan summed up his overall relationship with Subhash in these answers in cross-examination:

"A. There was not a relationship as such. What happened was that Mr Subhash used to be the director of the companies, so if I had any doubt about the company or any matters of it, I would speak to him to clarify matters. That is all.

Q. Sorry, I misheard that. What was Mr Subhash of the company?

A. I am sorry about the confusion. Mr Subhash was a previous accountant of the companies Teso and Glen but we did not have any relationship. What happened was, if I had any doubts or any questions about any matters, I would ask him. But this was a rare occasion that I needed to get some information but there was not a relationship as such."^[124]

301. Contra indications in other evidence. The evidence in fact showed that Subhash and Mr Harjivan acted as if they had, and considered themselves to have had, an on-going close business relationship over many years which was coupled with a family relationship. The following are examples of situations in which either Mr Harjivan or Subhash acted as if, or asserted that, Mr Harjivan and Subhash were closely related and closely associated in business matters:

(1) Subhash's references in correspondence to Mr Harjivan's son Mitesh as his "nephew" and to Mr Harjivan as his "cousin" and "family".^[125]

(2) The fact that Subhash was prepared to make an interest-free loan of £10,000 to Mr Harjivan and his son because they were "family".^[126]

(3) The fact that Mr Harjivan and his family looked to Subhash to assist them, and that Subhash was prepared to assist them, to attempt to raise a mortgage loan in England to fund their clothing business in Lisbon.

(4) The fact that Mr Harjivan was invited by Subhash to spend some time with him and his other friends at his villa in Tenerife, a fact Mr Harjivan initially sought to deny.^[127]

(5) The fact that Mitesh, Mr Harjivan's son, was prepared to assist Subhash and lend his name to steps taken by Subhash to try to prevent Birkett Long from enforcing a fees judgment they had obtained against a flat at 92 East Dulwich Road registered in the name of Vijaya.^[128]

(6) The fact that Mitesh was again prepared to assist Subhash and lend his name to steps taken by Subhash to try to prevent the purchase by the long leaseholders of 92 East Dulwich Road of the freehold of that property.^[129]

(7) A final example occurred when Mr Harjivan was being asked about the occasion when Subhash had asked Mr Harjivan's son to sign, and his son had signed, a witness statement that was false in all material respects and Mr Harjivan had accepted that the witness statement had contained what he described as "mistakes". Party 4's counsel interjected:

"Q. Those are not mistakes are they; the position is this, is it not; when Subhash needs you or your family to lie for him you do it?

A. We do not do anything for him. Our family has nothing to do with his family."^[130]

302. The contrast between Mr Harjivan's evidence, prior to his return to the witness box in October 2006, and the other evidence relating to his relationship with Subhash could not have been greater. The reality was that Mr Harjivan was either a blood relative of Subhash's or a member of the Thakrar family circle who had, for many years, had a close business and social relationship with him. It would appear that that relationship was not an equal one in that Mr Harjivan always appeared to be acting for Subhash and under his direction. Indeed, Mr Harjivan was unable to demonstrate that he had personally benefited in any way from his relationship with Subhash.
303. Harjivan's subsequent acceptance of close relationship with Subhash. By the time he returned to give evidence for the second time, Mr Harjivan had dramatically changed his evidence. Mr Harjivan had initially said in his fourth witness statement that, at a meeting with Subhash prior to his purchase of those companies, Subhash had shown him a number of financial documents:

"… in order that all of the information could be taken into account when arriving at a figure for the purchase of the company."^[131]

304. When subsequently giving evidence, however, Mr Harjivan's evidence was that he had not relied on these documents in deciding to purchase the shares in Glen but had, instead, relied on Subhash's advice and on the trust he had in Subhash who had:

"… assured [him] that the situation of the company was good"^[132]

305. When it was put to him that he was asking the Court to believe that his decision to spend some £12 million on Glen and Teso was taken purely on the basis of the say-so and his trust of a person who, a few weeks earlier in July 2007 he had said in evidence he hardly knew, Mr Harjivan replied:

"If I said that, I do not remember now." ^[133]

306. He then proceeded to allege that between the time he had met Subhash at Bhiku's funeral in 1986 and the time he had met Subhash in Tenerife in 1998 he had met Subhash:

"[o]n many occasions and many parties and many ceremonies in London."^[134]

307. Conclusion – Subhash/Mr Harjivan relationship. I find that there was a close relationship between Subhash and Mr Harjivan and, indeed, the two were probably related. After all, Mr Harjivan first met Ramila at Ramila's brother's funeral in Lisbon in 1986. The fact that Mr Harjivan initially lied about this relationship when first giving evidence supports the conclusion that his evidence had been fabricated and, in this case, the fabrication was so obvious that, on returning to give evidence for the second of his two spells, he felt forced into giving the truth that there was a close relationship since this was by the time his second bout of evidence started, overwhelmingly obvious from all other evidence then available.

7.3.3.8 Dishonesty as to his Loan to the Thakrar Family for Them to Participate in the Indian Investment

308. Even taken in isolation, as I have already shown,^[135] Mr Harjivan's evidence about his supposed investment in India and his funding of the same was wholly unparticularised and unsupported by any cogent contemporaneous documentary evidence. But Mr Harjivan added to this evidence the further evidence that he had, at the same time as he had invested £1.6 million on his own behalf in the Indian project, lent an identical sum to the Thakrar family so that they also could invest in this project. This additional evidence appeared to have been given so as to appear to corroborate the evidence previously given to the Court of Appeal by the Thakrar family when opposing Party 4's application for security for costs that at the same time as Mr Harjivan had invested £1.6 million on his own behalf in the Indian project he had lent an identical sum to the Thakrar family so that they also could invest in this project. This further evidence was also wholly unparticularised and unsupported by cogent contemporaneous documentary evidence.
309. Indeed, cogent contemporaneous documentary evidence was adduced which appeared to completely undermine Mr Harjivan's evidence. This was Glen's balance sheet for the period during which Mr Harjivan alleged that he had made the loan to the Thakrar family. This balance sheet is highly material because Mr Harjivan also gave evidence that he:

"… assigned the benefit of the loan to Glen in order that it could take security for the loan to the Thakrar family".^[136]

310. The balance sheet of Glen for the year ended 31 March 2004 showed that the figure for "Debtors and Prepayments" actually went down from £1,131,187 to £965,920 over the year 31 March 2003 to 31 March 2004 notwithstanding that during this period^[137] Mr Harjivan said that he had made a loan of £1.6 million to the Thakrar family and assigned the benefit of that loan to Glen. Further, it was clear from note 7 to the accounts that £789,420 of the figure of £965,920 shown as due as at 31 March 2004 was attributable to a loan advance that was plainly not Mr Harjivan's alleged loan to the Thakrar family. When this was drawn to Mr Harjivan's attention in cross-examination, he changed his evidence and stated that the loan was not assigned to Glen but to Teso and sought to justify that evidence by drawing attention to a document headed "Summary of outstanding loans due to Teso as at 31^st March 2002, 2003, 2004, 2005" that he had exhibited to his second witness statement dated 6 September 2006. However, this document did not evidence any assignment of indebtedness to Mr Harjivan from the Thakrar family which he had assigned to Teso since it was no more than a spreadsheet that SKTL produced in December 2005 and it therefore provided no evidence of any liability of the Thakrar family to repay a loan to Teso.^[138]
311. Furthermore, Mr Harjivan's explanation as to where he got the money from to make the loan of £1.6 million to the Thakrar family was the same unparticularised and unsubstantiated account as his account of where he got the money from for his own investment in the same project. His cross-examination on this part of his evidence that related to the alleged loan to the Thakrar family did elicit additional features which further highlighted the mendacious quality of his evidence and the improbability that this loan had ever been made or that any investment in this project had ever occurred. In particular:

(1) Mr Harjivan's alleged borrowing comprised numerous individual loans over several continents, yet Mr Harjivan, despite having what he described as being a "very weak" memory, kept no record of the amounts borrowed in each case or of the rates of interest agreed or applicable in each case apart from a diary as to which he variously said that he did not have it with him, he did not have it at all, it was not an actual diary but was like a pad of paper and he had thrown it away.^[139]

(2) Mr Harjivan kept no records of the loans he had made to other Parties or of the rates of interest that he had charged them because "[he] trusted them" When asked how, if his memory was not very good, he could have remembered who they all were, his answer was that he had no explanation: "I do not know how to explain that to you at the moment." ^[140]

312. Whilst giving evidence, I warned Mr Harjivan about how important it was for him to provide supporting evidence if he wanted the court to accept his unusual and unsubstantiated evidence. Thus:

"Q. Would you explain to Mr Harjivan that this is important evidence that he is giving and he is asking the court to accept evidence without any supporting documents or other evidence.

A. Could you first repeat that?

Q. Could you then say that I will be asked by the other Parties in the case not to accept any of this evidence because there is no supporting documents or other evidence; it is simply his word of mouth in the witness box. Then could you say could he tell me why he says that I should accept his evidence without there being any support at all?

A. I am afraid I do not have any documents at all to support my evidence.

Q. But he is also not prepared to name people who might be able to support his evidence. Could you say I am not going to insist that he names these people, it is for him to decide, but if he is not prepared to name them, I must take into account the fact that he is not prepared to name the other people when I consider whether I can accept his evidence or not."

313. Mr Harjivan's response was:

"I will try to find people who I might give you the names of. It will be difficult, but I will try".^[141]

In the event, when Mr Harjivan returned to give evidence on 9 October 2006, he was still unwilling and unable to provide the court with a single name.

314. Furthermore, Mr Harjivan was asked whether he had seen any document that recorded security for the loan provided to the Thakrar family, he replied:

"A. I have not seen any documents, but I know there has been recorded in the accounts.

Q. How does he know that?

A. Because I had a conversation about the subject and they showed me some accountancy papers that there was a debt.

Q. Who showed him?

A. It was at the SKT office.

INTERPRETER: And he said Mukesh.

Q. Mukesh showed him?

A. Yes. Mukesh showed me.

Q. I have not seen any document that shows that there is a mortgage in favour of Mr Harjivan as security for a loan that he has made to the Thakrar family for this investment.

A. No documents were prepared, but in the accountancy papers there is a record of it.

Q. So is it Mr Harjivan's understanding that there is a mortgage, but that the mortgage is not in a formal mortgage document, it is simply referred to in accountancy papers?

A. Yes."^[142]

315. In his unprompted evidence immediately after these exchanges, Mr Harjivan stated that the paper he was shown by Mukesh was the balance sheet. Mr Harjivan was again warned of the difficulty he faced in persuading the court to accept his evidence on this topic:

"Q. Could we just explain again to Mr Harjivan: Mr Barby and Mr Shelton have explained to me what that document is. They said that all the information in that document came from Subhash. They did not have any knowledge themselves of that information. Does he understand that?

THE INTERPRETER: He says...

A. I am sure, although not absolutely sure, that these mortgages were set up by Roger Lafolley. This document might be here.

Q. If I can just go on. Subhash has said he will not give evidence to this court, so I have not heard from Subhash. There are no documents that we have seen from Glen that show this mortgage -- if I could just finish. So far as the court is concerned, the only evidence that we have, the only direct evidence we have of these mortgages, is from Mr Harjivan. Is there anything else that Mr Harjivan can tell me which can show that there was a mortgage?

A. I do not know, and I am not going to go through all the documents which have been filed with the court, but I might ask one of the Thakrar family members about it and see whether they can provide me with something."^[143]

316. I conclude that Mr Harjivan did not loan any money to the Thakrar family in order to enable them to invest in an Indian investment project and did not assign the benefit of any loan that had been made by him to Glen or Teso. As counsel for Party 4 put it succinctly in cross-examination:

"… the position is this, is it not; when Subhash needs you or your family to lie for him you do it?

We do not do anything for him. Our family has nothing to do with his family."^[144]

317. Overall, these passages of the evidence confirm the conclusion that I have already reached that there never was an agreement to invest in property development in India involving any member of the Thakrar family, that no such investment ever took place and that the Thakrar family and Mr Harjivan's evidence on this topic was both erroneous and fabricated.

7.3.4 No Payment to Ramila or Vijaya

318. Ramila gave evidence that I have accepted as true in judgment no. 5 that she never paid anything to SPC or to anyone else for the properties, including the portfolio of properties, that were transferred into her name. She was liable to pay just under £1 million for the portfolio if the contract for this sale was genuine. Both Vijaya and Ramila gave evidence that no money changed hands when Vijaya was alleged to have bought Ramila's shares in Glen although the 250 shares would have been worth several million pounds. Finally, Vijaya gave evidence that she received nothing despite Mr Harjivan's evidence that he paid £12 million for her 499 shares in Glen.
319. There was no other evidence from any of the defending Parties about payment until Subhash elected to put in evidence in reply to additional evidence that they were permitted to admit after the record had been closed in relation to the paragraph 81 application concerning the administrators appointed by Glen's directors in April 2007. Subhash's evidence covered a wide field and he signed the statement and verified the truth of its contents on oath. This statement included this bold assertion about Vijaya and Ramila:

"The court cannot condone their [the two principal solicitors acting for Party 1 and the principal solicitor acting for Party 4] lies and tactics to stifle and/or dishonestly profit or cheat any litigants under any circumstances – self created by the claiming Parties presentations without clear factual documentary evidence but on Ramila and Vijaya's creative hearsay and perjured evidence produced by Party 1 and Parties 2 to 4."

320. Since this serious but unsubstantiated allegation had been made on oath by Subhash, I decided to ask Subhash before he was cross-examined on his witness statement in relation to matters concerning the Paragraph 81 application, having reminded him that he was giving evidence on oath, to elaborate on these allegations.

"JUDGE THORNTON: Are you prepared to sign that and, by signing it, you are confirming on oath that the contents of that document are true to your knowledge and belief?

MR SUBHASH THAKRAR: Yes, I do, because I can't go back on what I've said.

JUDGE THORNTON: Okay. Would you kindly sign it, then? (The document was signed).

MR SUBHASH THAKRAR: There you are.

JUDGE THORNTON: That whole document will now become an exhibit in the trial. If you would just keep it there. What I would like to ask you, Subhash, there is a large number of questions that I and the claiming Parties will have no doubt have, if every point that you raised were to be discussed, but I have ruled that you had the opportunity to be questioned on many matters, and you, as we now, on advice, claimed the privilege against self-incrimination, and I subsequently invited you and the claiming Parties whether, in the light of the change of the law, which no longer would enable you to claim that privilege, you would wish to submit yourself to questioning on all the issues in the case, and whether the claiming Parties would wish to question you. You elected not to submit yourself, and the claiming Parties elected not to apply again to cross-examine. In the light of that, it does not seem to me to be appropriate, merely because some of the matters are set out in your statement, to re-open the whole question of your cross-examination. But having said that, in this statement there is a particularly serious allegation, or evidence, rather, that you give. It's the passage where you're dealing with Ramila and I think Vijaya as well. You refer to, and I read:

"Ramila and Vijaya created hearsay and perjured evidence."

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: I would like to ask you if you would please summarise the principal parts of the evidence that you say are perjured.

MR SUBHASH THAKRAR: Yes, I can.

JUDGE THORNTON: Thank you.

MR SUBHASH THAKRAR: …

JUDGE THORNTON: Can I come back to the perjury that you say Ramila and Vijaya have committed. Do you say that it is perjury when Ramila and Vijaya say that they have never received any money in any currency in any country for the properties that are in this country or for the shares in either Glen or Teso? Is that a lie or is that true?

MR SUBHASH THAKRAR: It is a lie, and I say this again. They have had monies and there is some evidence that we were able to find, okay, we've given it to you.

JUDGE THORNTON: How much money do you say they have received?

MR SUBHASH THAKRAR: Over the years it's been quite a lot of money but I don't know the precise amounts because all the files have been seized and suppressed, we don't have the documents to show you. Whatever we could find if I could give them to you, there was in fact a cheque which Kiran sent to you of £10,000 which was – I can't remember the date, but it was for Shimeer's wedding and shows at the back, it's a repayment of the loan, and that was after in effect all the monies – after paying off all the debts and creditors.

JUDGE THORNTON: Are you able to say in approximate terms how much money Ramila has received over the years for the shares that were registered in her name in Glen?

MR SUBHASH THAKRAR: You will remember that she became a shareholder in 1989 when Glen was formed. She decided to get married in 1999, and she had only one share and everything from the family was transferred to Vijaya and she had one share, and in spite of that she got substantial monies for her wedding, holidays, and I can't remember how many thousands of pounds she has had, even tens of thousands of pounds. And also when she bought her house she had monies there, she had monies for her other properties which the family had. So over the years it's quite a considerable sum of money.

JUDGE THORNTON: All that money was paid for what?

MR SUBHASH THAKRAR: Well it was paid for, you know, various family needs that were there for the family: sisters and brothers married, educated.

JUDGE THORNTON: What was she selling in order to get that money?

MR SUBHASH THAKRAR: It was just in between monies she was getting.

JUDGE THORNTON: For what?

MR SUBHASH THAKRAR: Monies that were in need for the family, because monies were borrowed from various other Parties which had to be repaid. So the repayment of those --

JUDGE THORNTON: Originally she was registered as the shareholder of the shares in Glen.

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: And those shares were transferred into Vijaya's name.

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: Did Ramila get paid anything?

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: For those shares?

MR SUBHASH THAKRAR: Yes, and also for the properties that were in her name for 15 months.

JUDGE THORNTON: What I'm asking you is the general evidence you've given as to money and properties that she received, were those paid to her in return for, and as the price for, the shares that were transferred from her name into Vijaya's name?

MR SUBHASH THAKRAR: Well, in the family, yes, there were, you know -- what's the word for it? -- set-offs between Ramila and Vijaya and Bhikhu and Nilesh and others.

JUDGE THORNTON: Are you able to provide a list of payments and properties that were paid to or made available to Ramila as the price that she was paid for agreeing to the shares being transferred from her name into Vijaya's name?

MR SUBHASH THAKRAR: There were several at times – I can't remember the dates, but between Nilesh, Shimeer and -- what's her name -- Ramila, for these accounts of various monies that were paid to her, and in fact there is a letter if I recall which is on Nilesh's litigation file which came from Vijaya setting up all the Amounts of monies that have been paid.

JUDGE THORNTON: There is a letter, is there?

MR SUBHASH THAKRAR: There was a letter, yes, and it was actually given to Jeremy Kleinfeld or (inaudible), I'm not sure what firm.

JUDGE THORNTON: No one in this courtroom has seen this letter.

MR SUBHASH THAKRAR: Let me say this to you, and I'm still on oath: there is still a hell of a lot of documentation which this court has not seen because they have been suppressed by my trustee. There are files that have also been suppressed by Ramila and David Gwillim having received them from other solicitors, and they continue deny having them. I am not a madman that I can say something to you on oath and say: look, there are letters, there is correspondence which was reduced in the Nilesh litigation, but there was a hell of a lot of hiccup about it. So what has happened to all of that? All the files and documentation? I'm grateful to Simon Barker [counsel for Party 4] for one thing, and that was the July 2001 the letter he gave to Kiran which you would know about.

JUDGE THORNTON: Are you able to put a value, an approximate value on the sum total of the monies and properties made over to Ramila over the years which you say represents payment to her for the shares?

MR SUBHASH THAKRAR: There was several hundred thousand pounds, you know, but for interest for what --

JUDGE THORNTON: Several hundred thousand?

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: Did that reflect a fair value for the shares?

MR SUBHASH THAKRAR: In those days, yes.

JUDGE THORNTON: Who valued the shares?

MR SUBHASH THAKRAR: I think it was just off-the-cuff discussion and valuation --

JUDGE THORNTON: Discussion with whom?

MR SUBHASH THAKRAR: Between the families, and the alleged, Ramila, Vijaya and others in the family.

JUDGE THORNTON: So there were discussions with Ramila?

MR SUBHASH THAKRAR: Yes, in fact before they went to India she took all the documentation and share books and everything with her.

JUDGE THORNTON: What about Vijaya?

MR SUBHASH THAKRAR: Same way --

JUDGE THORNTON: Is Vijaya lying when she says she has received no money at all?

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: How much has she received?

MR SUBHASH THAKRAR: Not as much as Ramila but she has definitely received monies.

JUDGE THORNTON: Mr Harjivan has informed the court that over the years he paid over £12 million for the shares in Glen.

MR SUBHASH THAKRAR: No, he hasn't said that to my knowledge.

JUDGE THORNTON: I'm not here to have a debate with you as to the evidence that I've received.

MR SUBHASH THAKRAR: Well my -- all I can say is it's my understanding that the total amount he had to pay was around £12 million for paying off all the loans and the shares and everything. That's what I've been aware of. It wasn't all for the shares.

JUDGE THORNTON: Well how much do you say that Vijaya has received for selling the shares in her name to Mr Harjivan?

MR SUBHASH THAKRAR: She was acting for the family as you know, so whatever the family gave her, including the monies that were given to her for various reasons. I can't precisely tell you, but as I said it was a substantial sum of money like it was for Ramila.

JUDGE THORNTON: When you say she was acting for the family what do you mean?

MR SUBHASH THAKRAR: She is a sort of, you know, non-resident, what you are, UK citizen. Her Siblings elected that she hold the shares for all of them, because Ramila was getting married and I think you probably know that when an Indian girl gets married she relinquishes all her rights from the family.

JUDGE THORNTON: Was Vijaya asked whether she would agree to hold shares in her name for other members of her family?

MR SUBHASH THAKRAR: Definitely, yes.

JUDGE THORNTON: Who asked her and when?

MR SUBHASH THAKRAR: She was asked by me, she was asked by Ramila --

JUDGE THORNTON: When?

MR SUBHASH THAKRAR: After Bhikhu's death, which would be about 1986, 1987, 1988. Something like that. And I remember, Vijaya came here in I think it was 1988 for a holiday.

JUDGE THORNTON: So in fact she wasn't the owner of the shares, she was merely holding the shares as a nominee for the Thakrar family?

MR SUBHASH THAKRAR: She was the owner for a certain extent but not the whole amount.

JUDGE THORNTON: Do you know which part of the shares she owned and which part she was holding for --

MR SUBHASH THAKRAR: As a child of Mrs Jeravim(?) Thakrar, my aunt, she was entitled to a share of the sum of money whatever the family decided.

JUDGE THORNTON: Which family?

MR SUBHASH THAKRAR: The Thakrar family.

JUDGE THORNTON: Her family?

MR SUBHASH THAKRAR: Yes.

JUDGE THORNTON: So who are the family members who formed the group that decided how much Vijaya was to --

MR SUBHASH THAKRAR: Before it was Ramila as the elder, then Bhikhu, who died in 1986, it was Vijaya, because Nilesh, Shimeer, Mivishah(?), Volshah and Neeta.

JUDGE THORNTON: Why was there a sale of shares from Ramila to Vijaya?

MR SUBHASH THAKRAR: Only because she did not trust her husband.

JUDGE THORNTON: Ramila?

MR SUBHASH THAKRAR: Yes, she didn't. And somewhere there was a letter I do recall saying, "I don't want him to know anything, I don't want him to know what the family has et cetera, and I am prepared to take a lie detector test, whatever you want, so I can be very sure what I'm telling you is the truth." And she did not trust even her brothers and sisters and that's why she did say please do not be influenced by her, saying she knew nothing, she can't speak English, she can't do this. That's a lot of lies to put it very simply in the best English language I can, because she went through businesses, she's done metric, which is O Levels, And please don't tell me that she doesn't understand English. How was she able to instruct Hardwick & Co solicitors?

JUDGE THORNTON: Do you know what part of the £12 million, paid by Mr Harjivan, represented payment for the shares, and what part represented repayment of loans?

MR SUBHASH THAKRAR: Repayment of loans were very substantial sum of money with interest recouped. I don't have the, what do you call it, the knowledge of the figures to, you know, give you the background. But the shares were not worth that much as the loans had to be repaid --

JUDGE THORNTON: Presumably Mr Harjivan was repaying loans as part of the consideration that he was providing Vijaya for buying the shares.

MR SUBHASH THAKRAR: Yes, Vijaya and the family.

JUDGE THORNTON: Now these loans. Who was the person or people who owed them money?

MR SUBHASH THAKRAR: There were lots of families. As I recall, there was the Ruparelia family, the Corteta family, there is one family, I can't remember their name, the Gokal family, I'm sorry, in South Africa and there was --

JUDGE THORNTON: And are all these members of Vijaya's family?

MR SUBHASH THAKRAR: No, they were friends of the family As well as people I knew also who had given them loans.

JUDGE THORNTON: But why would Mr Harjivan be repaying loans owed by people that you know as part of the money he was paying to buy Vijaya's shares?

MR SUBHASH THAKRAR: Because I had organised the loans for the family to have, you know, for them to buy properties and pay for various things, to sort of deal with the company's portfolio. And that was perfectly acceptable in, you know -- what's the word for it – agreed between all the Parties.

JUDGE THORNTON: But did Vijaya agree to it?

MR SUBHASH THAKRAR: Of course she did. She knew in 1988 and thereafter she was dealing with matters right up to I think 1995 -- when did her daughter get married? Just before then. I don't know the year she got married."

321. A little later in his evidence, Subhash asserted that Vijaya had received small sums of money to pay for her children's education and to pay for other living expenses that, in all totalled less than £100,000 over many years. There was no substantiation of these sums and no basis for this evidence to begin to undermine Vijaya's patently honest and independently corroborated evidence.
322. At the conclusion of this part of his evidence, I asked Subhash why he had stated in evidence at trial no. 1 that he did not know who had bought Glen when in fact he knew perfectly well that it was Mr Harjivan. Subhash then lied since he obviously had no means of satisfactorily explaining the blatant lie he had told during trial no. 1. He stated:

"Q. Is there any reason why you didn't identify the Portuguese family?

A. There were instructions to me that they didn't want anybody to know their investments.

Q. But you were on oath in court and you were asked a direct question: Who has bought Glen?

A. Yes, well, then I probably didn't get, you know, why do you call in the right – what's the right word – I didn't get the right advice to tell you that, look, I'm under oath, I have to tell you everything correctly. But I was certainly telling you as I recall that I could not divulge any more."^[145]

323. Subhash was clearly caught out by this crucial question and his bluster and lack of any coherent or credible explanation for what was, on the face of it, a clearly identified and blatant lie given during his cross-examination at trial no. 1 speaks volumes as to the dishonesty in relation to Glen, Mr Harjivan and his conduct throughout the Thakrar Litigation particularly in connection with both Ramila and Vijaya.
324. The summary of this evidence is as follows:

(1) Ramila was paid a total of several hundreds of thousands of pounds for her shareholding in Glen.

(2) The payment was made partly to her and partly by way of set-offs between members of Ramila's family.

(3) There is a document on Nilesh's litigation file which puts a value on the total payments made.

(4) Ramila sold the shares to her sister because she did not trust her new husband and her new sisters.

(5) The total value of the shares used to determine the amount of the payment was settled in discussion between members of Ramila and Vijaya's family.

(6) The payments made by Mr Harjivan to Vijaya for her shares fell into two component parts. These was a sum of money which was less than Ramila was paid that was paid to Vijaya and another larger sum paid to various family members to repay their debts that Vijaya's family owed them.

(7) Vijaya was acting for the family so that, by inference, the shares held in her name she held for various members of the family.

(8) Mr Harjivan paid off the family debts because these had been organised by Subhash to buy properties for the Vijaya family portfolio.

325. The day after Subhash had given evidence, he sent the court an e-mail which read as follows:

"Dear Judge,

I enclose two Schedules of monies given to Mrs. Vijaya Radia and Ramila which will assist you to appreciate sums of monies that have been taken by the two members of the family.

In addition, Nilesh has had substantial sums of monies also with the properties which are currently valued at £3m. The education and marriage costs of Shimeer, Nimisha, Neeta were also paid out of the family trust monies and other monies. The details of all these were contained in files and accounts agreed between the Parties as we recall. The Trustee has taken everything and you need to make very firm Orders if you wish to see the evidence to support these two Schedules and monies given to the members Thakrar family.

 No doubt, there will be arguments and further discussions arising. I am sorry that I was not prepared for these figures until I sat down and discussed with others to be reminded of the sums."

326. The enclosed schedule listed 16 different items paid to Ramila against each of which was a rounded lump sum. The total of these items totalled out at £968,400. For Vijaya, there were 11 items which totalled £347,200.
327. Unsurprisingly, Ramila and Vijaya, through their brother Shimeer who acted as their representative and, in Ramila's case, also acted as her McKenzie friend, submitted a short and somewhat outraged submission in reply to this late and highly contentious evidence and submission. This reply stated:

"The 2 schedules sent by Subhash with his e-mail of 26/9/07 timed 16.11 are totally incorrect and not supported with any documentation. All figures are more lies and Subhash is unable to substantiate any figures on these schedules. In his last paragraph he says " I am sorry that I was not prepared for these figures until I sat down and discussed with others to be reminded of the sums" - how can Subhash not be prepared for these substantial sums if they were correct. He obviously wanted more time to create these unsupported schedules just like he has created many other documents in the past (for just one example please see Subhash's evidence given on 24/9/07 with regards to minutes of meetings that he had created without meetings actually taking place). More of these lies would have become apparent if he had given evidence during the fact finding stage of the trial.

The other reason why Subhash could not remember these figures is simply because he did not want any follow up questions from the learned Judge and any other claiming Parties. Subhash is clearly hiding behind e-mails. Ramila & Vijaya request the Judge not to take the e-mail and these 2 schedules as evidence from Subhash as he has no proof and has not been questioned.

The last paragraph of Subhash's e-mail below says "No doubt, there will be arguments and further discussions arising" - This clearly shows that Subhash has doubt in his figures as they are incorrect and made up.

Reading Subhash's evidence of 24/9/07 clearly demonstrates lies after lies."

328. This response drew an immediate, infuriated and intemperate response from Subhash. This e-mail came as no surprise since Subhash had, in the weeks prior to my handing down judgment following the close of the record, bombarded the court and the Parties with a series of e-mails in like vein to this one. The relevant parts of Subhash's response to Shimeer's e-mail were as follows:

"I have expressed in my earlier e-mail that [Ramila] and [Vijaya] with Shimeer must attend the Court and be cross-examined on Oath. They must give Affidavits also. It is not sufficient for an e-mail sent today 29 September 2007 at 16:43 to "respond" to you. It goes no where to disprove and they do not deny the sums given as I note. The style of writing by Shimeer is not his as I do know and I have helped him in various other matters of family and Solicitors correspondence on Ramila, Nilesh litigation. So please do not be misled that he is capable to deal with all issues or write such an e-mail. I would like him also to produce the recent telephone bills that he has spoken indeed to Vijaya in Kisumu last week and those will be available to him or RSB. Would you please order for him to come to the Court because I am sure that Vijaya will not be able to deal with the matters so quickly in a way that you are being misled to believe. I do not believe Shimeer at all or his stories, so put him to strict proof, please.

 I am more than happy for all the family and client Solicitors files and documentation to be produced to the Courts by Mrs. Shirley Jackson and Mr David Gwillim, which will show what I have stated and what I have recalled to be factual. "If everything I am alleged to be saying is "totally incorrect and not supported with any documentation", than there will be no hesitation in Claiming Parties 5 and 6 introducing all the original documentation to the Court to disprove me. I challenge them all to do so. Are they saying that there were no legal costs paid for Ramila and Vijaya, when Solicitors were acting, they would not have worked without funds? Are they saying that monies did not come to them from Nilesh's settlement of £75,000, are they saying that £75,000 or more did not come from 47 Birbeck Road, Sidcup Sale, and lot more which I have stated. If the files were not suppressed by the Trustee and Mr Gwillim I will be able to prove those figures without any hesitation. Shimeer also has copy documents which he kept himself for Ramila and Vijaya. If the figures and what I have stated are lies and I am unable to substantiate it because of the seizure of the documents and files, than please Order the matters and the Police to investigate the matters fully with the Solicitors who had acted also to recollect or produce documentation they have or have given to Mr David Gwillim, Vijaya, Ramila or Shimeer or any other Solicitors who have requested them of them last year. Ask them to state what and where they are held, please."

329. My conclusions about this additional evidence, commentary and vituperation provided at a late stage of the trial by Subhash in the guise of responding to evidence that he had been the driving force behind the decision to place Glen in administration and had provided or procured the necessary funds to instruct the professional administrators to agree to their appointment are as follows:

(1) The payments that Subhash so belatedly listed as having been made to Ramila and Vijaya to pay them for their shares in Glen, were of four kinds:

(i) Payments that may have been made to Ramila and Vijaya out of the trust fund set up to provide for the siblings of Jayaben out of the fund administered by Subhash which were supplied over the years from Kenya.^[146] These payments have nothing to do with the shares of Glen and Teso and the ex-SPC properties held in Ramila and Vijaya's names.

(ii) Payments made by Subhash or Glen for work or services performed on or for ex-SPC properties which were at one time held in either Ramila or Vijaya's names. However, those properties were owned by Glen, on Subhash's case, and the outgoings needed to service and maintain them were Glen's responsibility. The shareholder of Glen therefore does not have an obligation to pay or reimburse anyone for these outgoings so the shareholder cannot be paid for her shareholding by the purchaser reimbursing whoever funded the maintenance and other outgoings that were paid for in order to maintain the properties prior to the sale of the shares.

(iii) Payments made for purposes connected with family personal expenses. These were small sums allegedly funded by Subhash for such matters as travelling to London for family purposes, medical, funeral and wedding expenses and the like.

(iv) Payments for purposes which are not clearly particularised and which were either never made at or, if made, could not have been made to Ramila or Vijaya.

(2) These payments were totally unsubstantiated in any documents, wholly unparticularised and appear to have been made at times and in circumstances which preclude them being linked to the sale of shares by Ramila to Vijaya in 1990 and by Vijaya to Mr Harjivan in 1999 – 2000.

330. If there ever had been any documents evidencing these payments, they would have surfaced in the search and seizure of documents undertaken pursuant to the two warrants obtained by Party 1 in Subhash's bankruptcy proceedings and on discovery from Parties 8 – 14. It is clear that no documents have been suppressed by Parties 1 – 4, as alleged by Subhash and the documents he alleges exist which substantiate these payments, I am satisfied, have never existed. In short, save for payments out of the Jayaben fund and some small payments for family purposes, no payments alleged by Subhash as having been made to or for Ramila and Vijaya were made. The payments relied on were made by or on behalf of Subhash for his own purposes or were never made at all.
331. The failure of any defending Party or Mr Harjivan to have made any attempt to obtain substantiating evidence and Subhash's failure to allow himself to be cross-examined about these payments or about anything else connected with Glen, Mr Harjivan, Ramila or Vijaya eliminate any remaining credibility with regard to Subhash's evidence that about these payments.
332. Subhash's evidence is wholly inconsistent with any other evidence adduced in the trial save, in part, with Mr Harjivan's evidence which I have already rejected in its entirety as being a combination of lies, fantasy and half-hearted attempts to establish his hopeless and dishonest case.
333. A full and careful reading of the transcript of Subhash's evidence and his follow-up e-mail that I have already set out above show that his evidence is literally unbelievable and was fed by a combination of his dishonesty and his fantasising about himself as a man of integrity, honesty and plain dealing. The evidence is that of a Walter Mitty character.
334. In short, Subhash is lying in relation to all evidence about these payments. No payments of the kind alleged were made to or on behalf of either Ramila or Vijaya.
335. Ramila and Vijaya never received any money from any source in any country that represented or formed part of any consideration paid for the acquisition of shares in Glen or Teso from any person or company. Their evidence remains both honest and credible and I both accept that evidence and reject Subhash's in its entirety in relation to payments made to or for shares in Glen and Teso.

7.3.5 Subhash Always Acted as Beneficial owner of Glen and Teso

7.3.5.1 Introduction

336. Subhash's answer in the many documents examined during the trial to questions about his role or status in the affairs of Glen and Teso was that he was acting under a power of attorney for the beneficial owner, in other words he was acting as the attorney of Ramila, Vijaya or Mr Harjivan as the case might be. He sometimes held himself out as their accountant. Thus, it was necessary to examine the circumstances and background to the innumerable separate instances when he was acting, purportedly in this agency role since he did not give evidence, save on the last day of the trial in limited circumstances^[147]. Thus, the principal way in which I have had to decide whether Subhash was the beneficial owner of Glen and Teso's shares has had to be by examining all the instances evidenced at the trial of his actions and considering whether each separately and all together are capable of being explained as the actions of an agent for the beneficial owner of the shares in, and hence of, these companies or whether they can only be explained as the actions of the beneficial owner himself. There were, however, many significant actions of Subhash which could be seen only to have been capable of being explained as the actions of someone who was, who was holding himself out to be and who considered himself to be the beneficial owner of the shares. I will address these particular actions and statements in this section of the judgment.
337. The actions of Subhash in relation to every aspect of Glen and Teso's activities were only consistent with Subhash being the beneficial owner of both Glen and Teso and, particularly when considered in the round, were wholly inconsistent with them being the acts of Subhash acting as an attorney and agent for some other beneficial owner. Equally, the actions of Mr Shelton in relation to every aspect of Glen's activities were only consistent with his acting under the direct instructions of Subhash and unquestioningly following those instructions whilst exercising no independent decision-making or management function of his own and where wholly inconsistent with his being and acting as a working director of Glen and taking his own management decisions on its behalf. The role of Mr Barby as a director of Teso was equally obviously that of a functionary acting exclusively on behalf of that company's beneficial owner.

7.3.5.2 Examples of Subhash's beneficial ownership of Glen and Mr Shelton's exclusively subordinate role

338. Original decision to form Glen. Subhash throughout the original trial tried to distance himself from Glen or any knowledge as to the affairs of Glen. Thus Subhash stated at the original trial that it was Ramila's solicitor, Mr Roger Smith of Claremont Haynes, who advised him that Ramila, because she was resident abroad, should form an offshore company to shield her from UK inheritance tax. As is now known from the contemporaneous correspondence that was not disclosed at the original trial but was obtained as a result of the search of the premises of SKT under the powers of the search and seizure warrant obtained by Subhash's Trustee, this idea in fact emanated from Subhash himself. Thus in a letter dated 31 May 1989 from Mr Smith to Mr Anthony Evered of Strachans, Mr Smith stated:

"in order to avoid the payment of inheritance tax in England should our client die, her accountants have proposed that she should arrange for the formation of a company in Jersey and that she should sell the properties in England to that Company in return for shares to be allotted to her in the Jersey company … The accountants in question (Messrs S.K. Thakrar & Co …) have instructed us to contact you to enquire whether you are able to assist …"

339. Subhash responded to the contents of this letter in his letter to Mr Smith dated 2 June 1989, in which he said:

"Thank you for your letter of 31^st May 1989, together with the copy of your letter to Anthony Evered of Strachans in Jersey.

What you have stated is perfectly correct, and I have cleared this matter with my client over the telephone.

All I would say is that her sister, Miss Vijaya Thakrar, is also to be a shareholder in the Company to be acquired in Jersey."

340. Of course, Subhash had not cleared anything to do with the formation of Glen with either Ramila or Vijaya over the telephone or by any other means. He had not discussed the formation of Glen with anybody. He took the unilateral decision to form Glen and then stated that this decision was taken on the instructions of two clients who were not clients at all for any purpose connected with Glen, its formation or the properties transferred into Glen's name following its formation.
341. Instructions to solicitors to act for Glen in the original portfolio purchase. It was Subhash acting without consultation with and on his own who arranged for Claremont Haynes to be instructed, purportedly on behalf of Ramila, to act on the purchase of SPC's property portfolio, and who had arranged for the memorandum of sale to be signed by Neil and Kenneth, and who had sent a copy of the same to Claremont Haynes.
342. Execution of Transfer of property portfolio. Subhash executed the Transfer dated 25 March 1988 whereby SPC's property portfolio was transferred to Ramila and also the agreement dated 30 March 1990 whereby Ramila agreed to transfer the bulk of the ex-SPC properties unsold as at that date to Glen. Since Ramila had not authorised Subhash to execute these documents, had not consciously provided him with authority to acquire property for herself, did not ratify this acquisition and was not accounted to by Subhash for this property and knew nothing about this acquisition before it took place, at the time it was executed or subsequently, these acts of ownership by Subhash are only capable of being the acts of Subhash as purchaser acquiring beneficial ownership in the property using the name of another as his nominee.
343. Obtaining fresh powers of attorney from Vijaya and Ramila. Prior to arranging in July 1989 for the issue of 250 shares, being half of the shares to be issued, in Glen to Vijaya, Subhash procured Vijaya, on a rare visit by her to England in September 1988, to sign a power of attorney in his favour. Further, prior to executing the agreement to sell the ex-SPC properties to Glen, Subhash appears to have obtained a further power of attorney from Ramila dated 15 March 1990. Ramila had no recollection of having signed this document on that date but it is not necessary to reach a conclusion as to whether it was a forgery or not. In both Ramila and Vijaya's case, such power of attorney as was signed was not signed with either being conscious at any time that it was to be used for the purpose of acquiring properties or owning shares. Subhash's only purpose in obtaining these fresh powers of attorney and then using them unilaterally without reference to Ramila and Vijaya or anyone else was to enable him to acquire the beneficial ownership of both the properties and the shares in question for himself using the names of others as his nominees.
344. Glen's formation. Subhash was responsible for the formation of Glen and for appointing Strachans, a firm of Chartered Accountants based in Jersey, to provide administration services for Glen, including signing Strachans' standard indemnity, purportedly as Ramila's attorney, whereby he committed Ramila to an open-ended liability to indemnify Strachans against any loss arising out of its administration of Glen. Without her express authority to commit herself in this way, Subhash could only have been acting on his own behalf using Ramila's name as his nominee.
345. Glen's objects only consistent with Subhash being its beneficial owner. Glen's only rationale was to hold the ex-SPC properties in England as a non-resident company with an overseas shareholder. It did not trade and its nominal directors, secretary and administration were provided for a fee by service companies based in Jersey. These companies were initially Strachans and subsequently Mr Shelton's company.^[148] Neither Ramila not Vijaya was ever appointed a director of Glen. These arrangements were made by Subhash without reference to anyone else and, again, can only have taken effect in law as arrangements made by, for and on behalf of the beneficial owner of Glen for the purpose of giving effect to that owner's wishes and intentions.
346. Ramila's move to the United Kingdom. When Ramila became resident in the United Kingdom in 1990, Glen was not wound up as it would have been if she had been its beneficial owner as there would have no longer been any tax advantage for Ramila in having the ex-SPC properties vested in an overseas company. Instead, the shares in Glen were simply transferred to Vijaya. Only Subhash appears to have been aware of this alleged transfer and it was brought about, if it occurred at all, by Subhash. The transfer of shares was unknown to either Ramila or Vijaya and this transfer, in these circumstances, can only be explained on the basis of its having been made by the beneficial owner who, for his own purposes, was changing the nominee holding in some of the share he owned beneficially from one name to another.
347. Teso's formation. It was entirely Subhash's idea to create a further overseas company in order to take a charge over the properties held by Glen as device to deter third Party claims against Glen. Subhash instructed Strachans to form such a company as can be seen from Mr de Figueiredo's letter to Subhash dated 5 December 1995:

"One of the further points of discussion that we had was your request for a new BVI company to be incorporated which would be used to take a charge on the properties currently owned by Glen so as to protect them from any claims made against the company. You indicated that the preferred name for the company would be Teso International Limited, but having applied for this name in the BVI it was unavailable, but the name Teso International Group Limited was available and I have therefore arranged for a company with that name to be incorporated and now enclose a copy of the Certificate of Incorporation …".

This action can only be explained as being a device thought up and implemented by the beneficial owner of Glen in order to achieve a dishonest vehicle to thwart bona fide claims against Glen and its assets. Clearly, that beneficial owner could only have been Subhash.

348. Strachans' dismissal by Subhash and the real reason for this. It was Subhash who in December 1996 dismissed Strachans as the corporate manager of the administration of Glen and Teso and who appointed Mr Shelton and his companies in their place. ^[149] The reason given by Strachans for their removal by Subhash, which they set out in a letter to him dated 7 January 1997, was that Subhash considered that they were charging unnecessary fees in running the company which it was Subhash's prerogative to run. Subhash's role was described in terms that can only be explained as his acting as beneficial owner:

" … What you have difficulty in grasping is that we are the Directors of these companies and as such need to know what is going on but, more importantly, are seen to be the people carrying out the actions. You see us simply as an office you correspond to or draft letters for, and do not take seriously our role. Bearing in mind the activities of the company, your involvement and its financial background I think you are taking an unwarranted risk with regard to the U.K. Revenue. In fact for the future I believe the Directors offshore should have more control and you purely perform an accounting function not a decision making function as you are inclined to do."

349. It is clear that Subhash had engineered Strachans' dismissal so as to make it look like a dispute about their professional fees and charges. In fact, it appears that Subhash was not finding it as easy as he would want to exercise proprietorial control over his company and wanted Strachans' removal for that reason. Had anyone other than Subhash been the beneficial owner of Glen, that person would have had to be consulted by Subhash first both as to the decision to dismiss the professional manager of his company and as to the identity and terms of appointment of the successor manager.
350. Subhash's terms of appointment when appointing Mr Shelton as replacement manager. Subhash made it clear to Mr Shelton when he appointed him to replace Strachans that Subhash would take all the material decisions about Glen and Mr Shelton's role would be to implement those decisions and, in order to provide a veneer of respectability, to front any discussions involving Glen and the Inland Revenue. That was plainly how Subhash regarded the role of the service company in December 1996 and it is apparent from Mr Shelton's evidence that Subhash's view of Mr Shelton and his companies was the same.
351. The way that Mr Shelton was required to play a subservient role to Subhash may be seen from these extracts:

"A. … the experience of Mr Thakrar is that he is a man who likes to get his own way"

Q. Was he the sort of man, as referred to here, who simply saw Anchor as an office to whom he sent correspondence or for whom he drafted letters?

A. He would attempt to act in that way, quite right.

Q. When you say 'He would attempt to act in that way', are you suggesting that he did not succeed in acting in that way?

A. Yes I am.

Q. He did not succeed in asking you to sign letters that he prepared for you?

A. Mr Thakrar did attempt to prepare letters on my behalf".^[150]

352. Mr Shelton saw his primary role as ensuring that Glen did not have any problems with the Inland Revenue and for that purpose he was prepared to take steps that Subhash may not have liked:

"Q. So, is your evidence that it did not actually matter, the extent to which Subhash acted or purported to act for or took steps or actions on behalf of Teso because in your opinion, Teso was not really important anyway?

A. It was not very important. It had no income. It made little difference what impact Thakrar had – Subhash had on Teso.

Q. Sorry, it made no impact on what –

A. It made little difference to the overall structure of Glen. I was concerned with Glen. Glen had the assets, Glen would be the one that if we allowed too much control to remain outside of our office, that would be – we would have the problems of the UK revenue. Teso had no problems, had no income. It had no real assets.

Q. To summarise: you were content for Subhash to control Teso because it did not have any UK taxation implications but different considerations applied when it came to Glen. Is that a fair summary?

A. I think that is a fair summary."^[151]

Outside of his role of acting as Glen's liaison with the Inland Revenue, Mr Shelton was content to let Subhash run Glen.

353. Glen's overseas loan accounts. Although the single biggest liability of Glen was its "overseas loan accounts", when Mr Shelton took over the administration of Glen he took no steps personally to verify their existence or validity.^[152] Furthermore, Mr Shelton was unable from his own knowledge to state or verify what the true amount of Glen's liability was on its "overseas loan accounts", not the least because the accounts of Glen prepared by SKT only showed the amount of principal owing and did not show what interest was owing. This can be seen from this extract:

"Q. So who was responsible for determining the amount that was outstanding to the shareholder by Glen?

A. In 1996, when we took it over, it was a historical loan and the additions or subtractions or interest calculations after that date were made by the accountants.

Q. How could the accountants make it?

A. They have all the information".

354. All matters concerning the financial relationship between the "shareholder" of Glen and Glen were handled by SKT. On Mr Shelton's own evidence, he would not know whether the shareholder had added to or subtracted from the capital of the company until he had received the balance sheet from SKT some time after the end of Glen's financial year.^[153]
355. Accuracy of Glen's accounts. While Mr Shelton asserted in cross-examination that he had "no doubt about the accuracy of the accounts" of Glen, he could give no explanation from his personal knowledge how the "shareholder's loan" had gone up from £3.7 million, being the figure shown in the accounts of Glen for the year ended 31 March 2001, to £5.9 million, being the figure shown in the accounts of Glen for the year ended 31 March 2004. Mr Shelton could only "surmise" that "some of the properties which were originally being held in one of the Thakrar's names at some time or another has been put into Glen at valuation" but could not say from his own knowledge whether or not that was what had actually happened.^[154]
356. Mr Shelton left it to Subhash to determine how to record the "shareholder's loan" and the charging and accrual of interest on that loan. Although Mr Shelton was, as he put it, "confident" that the figure for the total debt plus interest of £16 million shown in Glen's accounts for the year ending 31 March 2004 was accurate, or indeed for any other year ending in Glen's accounts, he could not say how it was made up. He had not checked the interest figure because he considered the amount of interest really owing to the shareholder as "irrelevant".^[155]
357. Mr Shelton's indifference to what he regarded as an irrelevancy but what would have been highly relevant in any circumstances other than one where the company, the shareholders and all assets of the company and its management were all treated as owned by, or in the sole direction of, one person, who regarded this as the beneficial owner of everything. Moreover, Mr Shelton's attitude to shareholder loan entries in Glen's account is very good evidence of the fact that these entries recorded fictitious or non-existent loans in the first place, which would be a likely consequence of everything being beneficially owned by one person.
358. Valuation of Glen's property in its accounts. Mr Shelton was not concerned what value was put on the property taken into Glen because, whatever the value was, it had been arrived at between Subhash and "the shareholder" and that was sufficient for him.^[156] Mr Shelton accepted in answer to questioning that someone within Glen would have had to have been "satisfied" that the property additions "had come from a reputable source".^[157] However, not only did Mr Shelton himself not perform this function but also, having suggested that it was the responsibility of the Compliance Department in Anchor Trust and being invited by me to call for and produce the file maintained by the Compliance Department, Mr Shelton never did subsequently produce this compliance file although he was clearly fully aware of its significance to the dispute about Glen's beneficial ownership.^[158]
359. I conclude that the person who satisfied himself that the property additions had come from a reliable source was Subhash and that the compliance requirements of the money laundering legislation within Glen were not operated in relation to property acquisitions. This was because Subhash was regarded as the sole beneficial owner of Glen and its assets and that Anchor Trust and Mr Shelton regarded themselves as having no role in relation to its management and trading operations save to follow Subhash's directions since he was Glen's sole beneficial owner.
360. No asset register held by Glen. The directors did not maintain an asset register and accordingly, save by looking at the balance sheets prepared by SKT , did not and could not know what were the properties it held as assets or what the value of the property portfolio was that Glen owned at any one time.^[159] If there was a list of properties, it was maintained at Subhash's office but no such document was disclosed or found in SKT's offices. When Mr Shelton was ordered to prepare an affidavit deposing to the worldwide assets of Glen,^[160] he had to get a list of Glen's properties from Subhash as the directors did not maintain an independent list of their own of the company's assets at their offices in Jersey or anywhere else.^[161]
361. Directors' valuations of Glen's property portfolio. The directors did not obtain or maintain their own valuations of Glen's stock of properties. Accordingly, when Mr Shelton was ordered to prepare his affidavit as aforesaid, the estimate of the property values stated in his affidavit were provided to him by Subhash. Mr Shelton sought to show that he had some grasp of Glen's affairs and denied that he was "entirely dependent upon what Subhash Thakrar told [him] as to what assets Glen possessed". This independent knowledge of Glen's affairs, he explained, arose because he had a fairly good knowledge of the company's property portfolio from his seeing various documents such as transfers, rent statements from estate agents, old leases, and solicitors' correspondence relating to title to the properties, and from personal visits and involvement in renewal of leases".^[162]
362. However, even when shown his affidavit that he had prepared that contained the list of Glen properties that he had been supplied by Subhash, Mr Shelton was unable to identify which of the properties were acquired by Glen after March 2001. This was a particularly glaring example of Mr Shelton's lack of familiarity with Glen's affairs and of the fact that Subhash was in sole charge of the management of Glen and acted throughout as if he was its sole beneficial owner.^[163]
363. Loan books. The directors of Glen did not maintain any loan books. Accordingly, if Glen had made any loans, the records of these loans would have been maintained at SKT's offices.^[164]
364. A letter from Subhash to Mr Shelton dated 27 January 2003 suggested that there was in existence in March 2002 a loan account in respect of money owed by Ramila to Glen, a written record of which Subhash had signed on behalf of Ramila as her attorney. The letter requested Mr Shelton to "complete the formalities". Mr Shelton's response when this letter was put to him in cross-examination showed that he was not responsible for the running of Glen and did not regard his role as being one of a director of Glen who had to take his responsibilities seriously.

This can be seen from this passage in his evidence:

"Q. [page] 725(5). Do have a look at it.

A. Sorry, I assume that if Glen completed the formalities, then this letter was seen by Glen.

Q. But it is addressed to you. So is it likely that you would have seen it?

A. Yes.

Q. I ask my question again. Can you assist me by explaining what Subhash is here referring to as an agreement of the monies due from Ramila at the time, which are now secured with Teso?

A. I assume this is – again, this is another assumption – at the time of the transfer of the shares from Ramila to Vijaya.

Q. Well, perhaps I can assist you a little further. You will see in the second paragraph, Subhash says this –

A. At the time in March 2002. It must have been in March 2002.

Q. So, again, what is this letter referring to and what are the formalities that you are asked to complete on behalf of Glen?

A. I do not know. I imagine that that would be minuted.

Q. Do you know what the reference to Ramila is?

A. I do not.

Q. I think you were mentioning a moment ago, did this relate to the transfer from Ramila to Vijaya, so I take it that actually, the name Ramila does have some resonance for you?

A. I do know who Ramila is, sorry.

Q. Who is she?

A. She was one of the original shareholders of Glen.

Q. In March 2002, was she still an original shareholder?

A. In March 2002, she was not.

Q. So, what do you think the reference is to the monies due from Ramila, secured with Teso, a reference to?

A. I do not know.

Q. Are you able to produce the account to which Subhash refers in this letter?

A. No.

Q. Does Glen have a loan book in the name of Ramila?

A. Glen does not maintain a loan book in Jersey, with Ramila.

Q. So, where would the loan book in respect of Ramila be maintained?

A. If there is a loan book in respect of Ramila, it would be maintained at SKT.

Q. So you would be unable from your own records and information to ascertain (a) whether monies were due from Ramila to Glen, or (b) if so, in what amount?

A. That is correct.

…

MR CRANFIELD: You will see Subhash refers in the first paragraph in his letter to various meetings and discussions in the past. So was this a matter on which you had detailed discussions with Subhash?

A. In my recollection, it was not.

Q. So that was simply an invention on his part?

A. In my recollection, it did not happen.

Q. Perhaps you can assist us? What were the formalities that you were being invited to complete in this letter?

A. Without seeing them, I cannot remember.

Q. We know it is in relation to an apparent loan account in the name of Ramila, does that jog your memory?

A. It does not, I am afraid, sorry.

Q. Do you suppose that Subhash was inviting you to sign off on behalf of Glen?

A. I assume that is what it was.

Q. Did you?

A. Without seeing it, I cannot say 100 per cent, but I would imagine that it was done.

Q. Again, in circumstances where your only knowledge about this matter was what Subhash told you?

A. That is correct.

JUDGE THORNTON: Does it go further than that: that you do not know when asked today whether you signed off a loan account in relation to Ramila at all, and that it may be possible that you did in fact never sign off such a –

A. That is possible, my Lord. I am saying that I assume it was done.

JUDGE THORNTON: If no such loan account has been unearthed in any location, including the offices of Thakrar & Co and I was invited to conclude that there was no such loan account in existence, would you have any comment about that?

A. Your Lordship can only make a conclusion based on the facts.

JUDGE THORNTON: That is the only way you are able to help me?

A. That is the only way I can answer at the moment."

365. It follows that Mr Shelton's only knowledge about Ramila's alleged loan account with Glen was what Subhash told him. Nonetheless, Mr Shelton believed that he did in fact complete whatever formalities were required of Glen to sign off the loan account. However, despite exhaustive searches in the offices of SKT and in every other location where relevant documents might be located if they ever existed, no such loan documentation has in fact been unearthed. I conclude that there never was a loan account, that Mr Shelton never sought to "complete any formalities" and that Subhash's letter was sent to Mr Shelton for some ulterior and dishonest purpose without Subhash having any honest belief that Ramila was or ever had been owed money by Glen. Mr Shelton, I find, merely ignored the letter once he received it. When asked whether he had any comment about this conclusion, if it were to be made, Mr Shelton had no comment to make about such a conclusion even though such a conclusion would lead to the inexorable conclusion that a potential fraud and deception had been perpetrated by Subhash.
366. I also find that this incident supports my conclusion that in anything relating to Glen which did not compromise its offshore status, Mr Shelton acted solely on the instructions of Subhash and did not exercise any independent discretion. In other words, save in a situation in which Glen's off-shore status was threatened, Mr Shelton unquestionably did what he was told or turned a blind eye to anything, such as the letter of 27 January 2003, that he knew or sensed was "part of Subhash's nonsense".
367. Glen's documentation. Mr Shelton never felt the need to inspect the documents of Glen that were being held by SKT, even though he visited their offices on several occasions.^[165]
368. Independent verification of identity of beneficial owner of Glen. At no time since he had become a director of Glen would Mr Shelton have been able to verify independently of Subhash who the current beneficial owner of Glen was. Thus Mr Shelton was forced to admit that if, for example, Glen had declared a dividend in July 2004, he would have had to go to Subhash and say:

"Who do you now say is the owner of this company? We need to pay a dividend. Who do we pay it to?"^[166]

369. Increase in capital stock. The terms upon which the capital stock of the company was added to were not the concern of the nominal directors of Glen but arrived at, according to Mr Shelton, between Subhash and "the shareholder".^[167]
370. Subhash's dishonest misuse of his control of Glen. Subhash was both able and permitted to organise the defence of Glen's properties from bona fide and good claims from third Parties even to the extent of fabricating fictitious third Party rights against the property with the apparent knowledge and consent of and the apparent active participation of Mr Shelton.^[168]
371. An example of Subhash's flagrant dishonesty, which could only have been perpetrated if he had total control over, and was considered to be the beneficial owner of, Glen's affairs, is provided by the Glen property at 92 East Dulwich Road. The long leaseholders of that property claimed the right, which they clearly had, to exercise their right to purchase the freehold. Mr Shelton agreed when giving evidence that:

(1) Subhash engineered Glen's purported "default" on its "borrowing" from Teso. This borrowing had been manufactured by Subhash and that although Teso's charge under its debenture extended to the bulk of Glen's properties including this one, the only property against which Teso purported to enforce this manufactured charge was 92 East Dulwich Road. There was no basis for either the property to have been charged originally or for the charge to be enforced.^[169]

(2) Subhash engineered a purported agreement between Teso as seller pursuant to its enforced charge and Mitesh as buyer to sell the freehold of this property to the Mitesh at a price of just under £150,000. This price was fixed by Subhash at a time when, according to a letter from Simon Clark of Kotecha & Co to Mr Shelton dated 11 April 2003, it had been valued at less than £8,000.

(3) These actions by Subhash were examples of:

"Subhash using Teso in an attempt to protect an asset of Glen, 92 East Dulwich Road, from the leaseholders of that property exercising their legitimate rights"

and

"an attempt … simply to thwart the lessees' altogether … by actually purporting to sell 92 East Dulwich Road at a time when the lessees were seeking to enfranchise, purporting to sell it to Mitesh".^[170]

372. Mr Shelton was fully aware of these activities on the part of Subhash, but took no steps to restrain him from acting in this way, let alone forbidding him to act in such a manner, which an executive director of Glen, as opposed to someone merely uncritically following the directions of the executive director of Glen, would have done.^[171]
373. Knowledge of the type of shares issued by Glen. The apparent executive director of Glen did not even know what type of shares had been issued in Glen. Article D of Glen's Articles of Incorporation authorised shares in the company to be issued either in the name of the owner or to bearer. Thus, the issued shares could all have been in the name of the owner or all bearer or some of one type and some of the other. The evidence disclosed this remarkable lack of knowledge of Glen's shareholding by the supposed sole executive director of Glen:

(1) During his cross-examination, Mr Shelton suggested that the shares in Glen were bearer shares, but then said that he had never seen them.^[172]

(2) In answer to the Judge's questions, Mr Shelton agreed that if the shares in Glen were issued as bearer shares, then the share register maintained by Glen and proffered as evidence in these proceedings of beneficial ownership in fact on analysis had no evidential value at all as to who the owner of the shares really was.^[173]

(3) In fact, Mr Shelton's belief that Mr Harjivan was the current holder of the bearer shares and therefore the beneficial owner of Glen was based solely on what he had been told by Subhash.^[174]

(4) When Mr Shelton was shown the original share certificates in Glen that have since been cancelled and which had been found during the discovery process in an original Glen file that had been forwarded by Glen to its previous solicitors, Decherts, namely, a share certificate for one share in Glen issued in favour of "S B Goweh" and dated 22 June 1989 and a share certificate for a further one share in Glen issued in favour of "STR Managers Ltd" and dated 26 June 1989, he was unable to identify whether they were bearer shares or registered shares. He then had to be taken to further documents, being one entitled "Transfer of Subscription from S B Goweh to R J E Managers Limited" and another entitled "Minutes of First Meeting of Directors of Glen approving Transfer" before he was able to agree that these shares had been issued as registered shares.^[175]

(5) The original share certificates were not issued "to bearer" but to named persons and accordingly on their face do not appear to be bearer shares.

(6) Mr Shelton's insistence that the shares issued to Mr Harjivan could have been bearer shares appeared to have been based purely by what Subhash had told him and without his having seen or been shown any documentary substantiation of the issue of any bearer shares.

(7) Mr Shelton was still unable to say whether the shares subsequently issued to Ramila and Vijaya were issued as registered shares or bearer shares.^[176]

(8) Indeed, it is quite possible that the other 498 shares issued in Glen were issued as bearer shares but there was no evidence adduced at the trial that provided any basis for such a finding.

374. Subhash asserted at different times in different contexts in a variety of different documents that bearer shares had been issued. However, there is no evidence of any such shares being issued by Glen and nothing other than general assertions in those places where the assertion is made that bearer shares had been issued.
375. Thus, the only "evidence" of bearer shares having been issued is found in generalised assertions emanating from Subhash such as those made in his telephone call to Evans on 1 July 2004 and in his letters to Mr Evans dated 8 July 2004 and Mr Shelton dated 17 August 2004 which Mr Evans appears to have accepted in his letter to Subhash dated 6 July 2004. What Subhash asserted, and Mr Evans' acceptance of that assertion may be seen in this extract from Mr Evan's letter:

"I have been doing a review of [Glen] and part of the review involves establishing ownership. It is clear from our files that the bearer shares were issued to [Vijaya] and [Ramila] …".

376. In the light of Mr Shelton's evidence, I find that the relevant contents of "our files" contained some letters and other documents which contained unsubstantiated assertions from Subhash that bearer shares had been issued by Glen without identifying when they were issued, to whom they were issued, by what authority of Glen they were issued, whether a necessary resolution of the Board was ever passed and the circumstances of their issue. None of these matters has ever been established by credible evidence nor evidenced in documents that are currently available. Without such details evidenced by appropriate documentary material which did not solely rely on Subhash's unsubstantiated assertions in documents that were not placed in evidence at the trial, there is no credible evidence that any bearer shares were ever issued.
377. I conclude that no bearer shares were ever issued, that Subhash was solely responsible for shares to be issued in the name of Ramila and Vijaya and that no shares of any kind were ever issued by Glen in the name of Mr Harjivan. Further, Mr Shelton was not involved in any way in the issue of any of the shares in Glen or Teso at any time.
378. General documentation. A large number of contemporaneous letters were written by Subhash to Mr Shelton, Mr Laffoley, Glen's solicitors, Teso's solicitors, lenders and others. The general tenor of much of that correspondence is of Subhash giving directions to the various professionals retained to provide management, legal and financial advice to Glen and Teso in a way which makes it clear that Subhash expects and intends those directions to be complied with without any query or hesitation. Much of the correspondence is not compatible with Subhash himself merely being an attorney or agent for someone else nor with him being anything other than the beneficial owner of Glen and Teso.
379. Board meetings and minutes. The final indication that Subhash exercised an iron and resolute control over all aspects of both companies and acted as if both companies and their assets and holdings were his personal fiefdom was provided by the fact that neither company appeared to hold regular board meetings and such board meetings as were held were usually held by telephone and were formal meetings held to ratify decisions taken previously by Subhash or to approve accounts previously drawn up by Subhash without the assistance of anyone else. It did not appear that the Board of either Glen or Teso ever discussed or had placed before them matters affecting the management or administration of Glen or that the directors ever involved themselves in management, supervision or decision-making.

7.3.5.3 General examples of Subhash's actions as beneficial owner of Glen

380. Quite apart from the examples given in the previous section^[177] of Subhash running, and being permitted by the directors of Glen to have the running, of Glen and Teso, in a letter to Mr Shelton dated 18 June 2001, Subhash specifically instructed Mr Shelton not to take any decisions concerning Glen without Subhash's agreement. The letter reads as follows:

"RE: CHANGE OF SHAREHOLDERS AND APPOINTMENT OF ADDITIONAL DIRECTORS

I have been advised over the weekend that [Vijaya] has sold her Shares. There are three new directors also been appointed to [Glen]. They are no doubt in addition to yourself and other present Officers, as I understand.

…

They have also requested that you please keep me fully informed and consult me at all times before making any decisions so that they can be appraised fully …

… They have advised that no serious decisions should be taken and any routine matters can be dealt with so long as I agree with you." (emphasis added):

381. Mr Shelton was asked about this letter in cross-examination and his answers are revealing:

"Q. Is that a letter you recall receiving?

A. I think I do, yes.

Q. If you look at the third paragraph, what is Subhash there telling you?

A. He is asking Glen to keep him fully advised and consult with him at all times before making any decisions; so that, in his words, they can be appraised fully.

Q. So, Subhash is saying that you must advise and consult with Subhash at all times, before making any decisions?

A. He is requesting us to do that.

Q. We see the words on the page. Would you like to go a little further? At the bottom, do you see the final sentence on that page:

"They have advised that no serious decisions should be taken and only routine matters can be dealt with, so long as I, Subhash, agree with you."

Do you see that?

A. I do.

Q. And you see the CC at the bottom?

A. I do.

Q. "The new shareholders and the old shareholders", whoever they may be?

A. Yes.

Q. Is that not a plain direction to you not to direct without Subhash's say-so?

A. It is.

Q. Was that not the constraint under which you operated at all the times that you were the director of Glen?

A. Definitely not, and I have documentary evidence to prove that that is not so.

Q. Was that the constraint under which you operated?

A. That is not the constraint under which I operated.

Q. Subhash took the view, did he not, that he could equally as well handle the affairs of the company as you could, and frequently he did so and simply told you afterwards; is that not true?

A. That was his view.

Q. Did that not happen?

A. It happened in, as it says here, routine matters.

Q. Well, it says here that you are forbidden from taking any serious decisions?

A. Well, that did not happen.

Q. It is only the routine matters that you are even allowed to make a contribution to.

A. Sorry, it was the other way round. That did not happen. I will be able to address that later.

Q. Subhash's view of life was misconceived?

A. Yes.

Q. And a rather different view from the view you took as to your role?

A. That is correct.

Q. But you did not consider that that led you to act under the constraint of Subhash constantly saying to you: you must do as I say and by the way, the shareholders are telling me that you must do as I say.

A. If Subhash had said: the shareholders have requested me to do something; that would have put a different light on the matter. But as a matter of course, Subhash did not make that statement.

Q. So, in the case of the letter that we have just looked at, that was effectively a direction communicated to you by Subhash, and you would have followed it?

A. To a certain extent, you are correct, but the problem is for the Glen directors, that they had a fiduciary duty to the company which overrides the wishes of the shareholders and overrides the wishes of Mr Thakrar.

JUDGE THORNTON: Can I ask whether you recall informing Subhash that you were not, as a director, able to comply with a direction that all the important decisions of the company should be taken by him and not by the company directors.

A. He had been informed by me orally and I will on re-examination, my Lord, produce to the court some samples of letters that I have written to him which I am sure the trustee has somewhere, which will prove my contention."^[178]

I responded to Mr Shelton's claim that he had documentary evidence to prove that he did not perform his services as a director of Glen under any constraint imposed by Subhash, in the following way:

"JUDGE THORNTON: … Your evidence is that you did not comply with this instruction and you informed Subhash in writing on a number of occasions that you were not going to comply with the instruction.

A. That is right, my Lord.

JUDGE THORNTON: It is obviously important that at some stage I should be presented with that evidence, and therefore, I merely indicate for the moment, this evidence is not available to the court".^[179]

382. Mr Shelton did not (on 02/08/06 Mr Shelton produced letters in which he gave instructions to Subhash. These are at tab 94 of Bundle 2(5).) produce in re-examination any letters that he had written to Subhash making it clear that Subhash had no authority to insist on being involved in or taking administrative decisions of Glen and no such letters were ever located by Party 1 or by any of the professionals acting in the Thakrar litigation. Mr Shelton never attempted to provide any such copies subsequently. I am satisfied that no such letters were ever written by Mr Shelton and that his reference to producing them at a later stage was a smokescreen invented due to his being under pressure when giving evidence because of the evasions and untruths he was having to give. He was, in other words, "fobbing me and the claiming Parties off until he ceased to give evidence and then he would forget all about this correspondence.

7.3.5.4 Statements made to the corporate manager of the Bank of Wales

383. Subhash gave the impression to Mr Manwaring, the corporate manager of the Bank of Wales that he was both a very wealthy individual and also the beneficial owner of Glen, when he wanted to borrow money to augment the property portfolio of Glen in 1999. This can be seen from a letter Mr Manwaring subsequently wrote to Mr Shelton dated 24 May 1999 as a follow-up to the meeting attended by both Subhash and Mr Shelton. He wrote:

"I write with reference to our recent discussions on Wednesday and Friday of last week and have pleasure in enclosing the new facility letter in respect of Glen …

As you are aware, I am exceptionally keen to develop more business with Glen and am extremely grateful for the opportunity to meet directly with Mr Thakrar on Friday last. During our conversation, it became apparent that Mr Thakrar, individually and through Glen, is a man of some substantial wealth owning (I believe was mentioned) properties valued at c. £35m with the only borrowing being our small facility and I understand about £500,000 elsewhere."

384. In cross-examination, Mr Shelton agreed that it was clear from this letter that Mr Manwaring had been given the impression at his meeting with Subhash and himself the previous Friday that Glen was simply the vehicle that Subhash used to hold his property portfolio. Mr Shelton further admitted that, although he had replied to Mr Manwaring's letter, he had not sought to disabuse the latter of this impression of Subhash that Mr Manwaring had understandably formed. The only explanation that he could give for not correcting any false impression about Subhash's beneficial ownership of Glen was that "the subject of Mr Thakrar's wealth was not relevant to the loan application". That was clearly an unacceptable explanation of an impression formed by a prospective lender to Subhash of large sums of money where that impression was conveyed to the lender by the prospective borrower. I asked Mr Shelton to reflect on his answer as follows:

"JUDGE: That is your answer?

A. Yes, my Lord." ^[180]

385. It follows that Subhash must have left the impression with Mr Manwaring that he was the owner of Glen and that Mr Shelton heard what Subhash told Mr Manwaring and did not consider that Subhash had misstated his role as being the beneficial owner of Glen to Mr Manwaring. In other words, Subhash had held himself out to be the owner of Glen and Mr Shelton thought nothing of it because that is what Mr Shelton believed him to be.
386. Conclusion, Subhash as beneficial owner and Mr Shelton as nothing more than his administrative assistant. I conclude that Subhash always acted as beneficial owner of Glen and Teso, always undertook all decisions and always made it clear that his instructions were to be followed without question by Mr Shelton and Mr Barby at all times. Mr Shelton always believed that Subhash was the beneficial owner of both Glen and Teso. Subhash always held the whip hand with Mr Shelton because, as the only mouthpiece of, and Mr Shelton's only point of contact with, "the shareholders", Subhash was always able to override his views if necessary by stating that "the shareholders" so willed it. Further, notwithstanding the Judge's invitation to Mr Shelton, Mr Shelton has failed to produce further documentary evidence sufficient to dispel the plain inference from the evidence before the Court that Mr Shelton did indeed operate under the constraints imposed by Subhash with regard to the running of Glen.

7.3.5.5 Examples of Subhash's beneficial ownership of Teso and Mr Shelton's and Mr Barby's exclusively subordinate roles

387. In addition to the situation concerning Glen that I have now dealt with, so far as concerns Teso, the evidence was clear that Teso had no function independent of Glen and that it was formed, and its only purpose was, to hold a debenture over Glen's and the Thakrar family properties to deter third Party claims. The directors of Teso always allowed Subhash to run Teso without any hindrance and to use it for such purposes as he alone thought fit.
388. The purpose behind Teso's formation is clear from a letter from Strachans, who were the company agents who incorporated Teso, dated 5 December 1995:

"One of the further points of discussion that we had was your request for a new BVI company to be incorporated which would be used to take a charge on the properties currently owned by Glen so as to protect them from any claims made against the company. You indicated that the preferred name for the company would be Teso International Limited, but having applied for this name in the BVI it was unavailable, but the name Teso International Group Limited was available and I have therefore arranged for a company with that name to be incorporated and now enclose a copy of the Certificate of Incorporation …".

389. In addition, Mr Shelton's evidence was that:

"… the intention, the reason, the raison d'etre for Teso, was that it would make people less liable or willing to take action against Glen, knowing that there was very little equity or there could be very little equity in Glen."

and

"It was always my understanding that the debenture that Teso held on the Glen properties was put there to put off any potential claims that may be made against Glen."^[181]

390. Barby's evidence was:

"Glen's accounts show an increasing indebtedness expressed to be overseas … The historic debt accrued long before my involvement with Teso. I understand that it represents the assets and funds advanced to Glen by the beneficial owners over the years. I am informed by the Bankrupt [i.e. Subhash] that Teso was formed in or about 1995 in order to take security for that debt in favour of the beneficial owner who had funded Glen."^[182]

391. In answer to questions put by me, Mr Shelton added:

"JUDGE THORNTON: Before we adjourn, can I ask you; you understood these to be shareholder's loans?

A. Yes, it is quite common, my Lord, that the shareholder in small companies or small private companies has provided funds at some stage which have not been provided as share capital to the company but simply as loans or introduction of assets.

JUDGE THORNTON: But the shareholder of which company?

A. I am talking about Glen here.

JUDGE THORNTON: So this is Glen's shareholder?

A. That is right, my Lord. What happens when a company is taken over by whoever; if you took over the shares in Glen, that shareholder's loan would simply be transposed into your name.

JUDGE THORNTON: I am merely asking about the actual shareholder's loan or loans that were recorded in the accounts of Glen. They were identified as shareholder in the singular, presumably, because there was only one shareholder?

A. Yes, shareholder's loan is shareholder, apostrophe s, my Lord.

JUDGE THORNTON: Was a sum of money identified?

A. There was a sum of money outstanding in the balance sheet.

JUDGE THORNTON: And those were loans made to Glen by the shareholder as recorded -

A. In Glen's books.

JUDGE THORNTON: - in Glen's books. And Teso was provided with a debenture?

A. That is right, my Lord.

JUDGE THORNTON: As security for these loans?

A. That is correct.

JUDGE THORNTON: But what would Teso's interests be in the loans to enable it to have a debenture over the assets of Glen?

A. You know, that was one of the reasons why I was not as convinced as Subhash that Teso was a very effective vehicle for securing these loans.

JUDGE THORNTON: Did you form any view when you became aware of this as to whether Teso had any interest in the loans, sufficient to support a debenture over Glen's assets?

A. That was always a concern to me, yes.

JUDGE THORNTON: That it did not have an interest?

A. Yes.

JUDGE THORNTON: If it did not have any interest, what would be the effect of that, in your view?

A. Well, if Teso did not have sufficient interest there, given the common ownership, I felt that it would be fairly ineffective and that the court might just lift the corporate veil in this particular instance and look right through them.

JUDGE THORNTON: And do what?

A. And decide they were ineffective.

JUDGE THORNTON: And therefore, the loans would be then unsecured?

A. Exactly, my Lord."^[183]

392. Mr Shelton's evidence in cross-examination shows how much Teso was the play-thing of Subhash and how little a role the directors of Glen had in its management. Relevant extracts were as follows:

"Q. What I am putting to you is that the way these companies were run in practice and the way Teso was run in practice, as screams out from this page, is that it was run by Subhash, and Teso and Mr Laffoley were merely regarded as the agents to give effect to Subhash's instructions?

A. I think that a fair summation of that would be that that would be what Subhash was trying to effect all the time, yes.

…

Q. So, is your evidence that it did not actually matter, the extent to which Subhash acted for or purported to act for or took steps or actions on behalf of Teso because in your opinion, Teso was not really very important anyway?

A. It was not very important. It had no income. It made little difference what impact Thakrar had - Subhash had on Teso.

Q. Sorry, it made no impact on what –

A. It made little difference to the overall structure of Glen. I was concerned with Glen. Glen had the assets. Glen would be the one that if we allowed too much control to remain outside of our office, that would be -- we would have the problems of the UK revenue. Teso had no problems, had no income. It had no real assets.

Q. To summarise: you were content for Subhash to control Teso because it did not have any UK taxation implications but different considerations applied when it came to Glen. Is that a fair summary?

A. I think that is a fair summary."^[184]

and

"Q. Mr Shelton, I think you eventually accepted this morning that the running of Teso was effectively left to Subhash, but that matters were rather different with Glen?

A. That is correct."^[185]

393. Subhash's role in relation to Teso also appears plainly from the contents of a letter written by Mr Laffoley to SKT in February 2005 in response to a letter of complaint from SKT dated 16 February 2005:

"Let me remind you that Subhash has acted as an adviser to Teso from the formation of the company and it was Subhash who has appointed and instructed various solicitors to act on behalf of Teso since incorporation. We were only informed after the fact when receiving instructions from Subhash, to send letters dictated by Subhash to the solicitors concerned."

394. 3.6 Mr Harjivan Never Acted as Beneficial Owner of Glen and Teso

7.3.6.1 Shareholder loans

395. According to Mr Shelton, the increase in the "shareholder's loan" shown in the accounts of Glen in the years after 2001, when Mr Harjivan had supposedly become the beneficial owner of all Glen's shares, represented "the shareholder's" additions to the capital stock of the company. However, this increase was, again according to Mr Shelton, the result of Glen's property holdings being augmented in the years 2001-2004 by "properties which were originally being held in one of the Thakrar's names at some time or another" prior to the time Mr Harjivan was supposed to have become a shareholder of Glen.^[186]
396. Thus properties were added to Glen's portfolio after March 2001 that were not owned by Mr Harjivan, yet it was the "shareholder's loan account", that is money or value owed by the company to Mr Harjivan for these properties, rather than a loan account in favour of the owner of the property that was credited with the value of the properties. Mr Shelton had no personal knowledge of the transactions involved but could only assume, consistently with the practice of SKT in crediting the shareholder's loan account but in the absence of any documentary or first hand evidence to that effect, that Mr Harjivan must have paid the owner for them when he purchased Glen. However, even Mr Harjivan when giving evidence did not suggest that he had bought from the owner of Glen any property other than or in addition to the shares in Glen and Teso.
397. In truth, the increase in the loan account was brought about by the beneficial owner of Glen deciding that, for accounting purposes, properties beneficially owned by him outside Glen would be re-assigned to Glen and the notional consideration paid by Glen for these properties would be added to the shareholder loan account. The only person who could have been the beneficial owner for these purposes and who could have taken and implemented the decision to augment the shareholder's loan was Subhash.

7.3.6.2 Terms upon which the capital stock of Glen increased

398. According to Mr Shelton, the terms upon which the capital stock of Glen was added to was not a matter that concerned the directors of Glen but were fixed as between Subhash and "the shareholder". However those terms are both unusual and uncommercial if the true shareholder was a person unconnected with Subhash. As I summarised the position as explained by Mr Shelton during his cross-examination in a question that he agreed with:

"And so, the basis upon which the property would have been transferred is that the value of the property cannot be reclaimed from the company for at least a year."^[187]

399. Thus, pursuant to these terms, the capital in the company was locked up, even from its owner. While such a provision would be highly unusual, whatever the financial circumstances of the owner, they become incredible if, as was suggested, it was Mr Harjivan who was the owner of Glen given that, according to him, he had no substantial assets outside of Glen. This incredulity was stretched beyond breaking point given Mr Harjivan's further evidence in cross-examination that he did not receive even any part of the rental income stream from the company from the Glen properties and that that income stream was both received, administered and spent by Subhash through SKT.^[188]

7.3.6.3 Glen's income never received by or applied for Mr Harjivan but received by and applied for Subhash

400. The most recent accounts of Glen for the year ended 31 March 2005 show that the income received was £1,129,932 of which £782,088 was spent on "property outgoings" and £325,035 on "management expenses", leaving an income before taxation of only £31,067. Of the "property outgoings" some £448,804 comprised "repairs, renewals and maintenance" and £176,745 "agents' commissions and fees". The "management expenses", apart from £36,272 for "director's and agents fees", comprised "legal and professional fees" of £190,883 and "general expenses" of 97,880.
401. The accounts, prepared by SKTL, provided no further breakdown. SKT and from September 2004 SKTL were both the accountants of Glen and Glen's property agent and manager of its property portfolio. They were appointed pursuant to a letter from Strachans to Subhash enclosing:

"… a letter from the Directors of Glen addressed to yourself confirming your appointment as Property Agent for the company with authority to carry out whatever actions you deem necessary in defending and maintaining the company's stock of property."

402. Mr Harjivan's evidence in his fourth witness statement was that:

"Although it is right to say that I have never sought to be paid a dividend, that is a matter which I had made a decision to adopt as a strategy, in other words to plough back the considerable turnover in terms of rental income, back into the company.

In particular, there was a rolling programme of ploughing money back into the company by refurbishing the property portfolio when it was possible to do so … ."

403. In other words, there was never any intention of allowing "the shareholder" of Glen to be provided with or be paid any of the money of Glen save for a courtesy non-executive director's fee for undertaking no role save signing documents on occasion when these were presented to him for signature. Glen's rental income, net of agents' commissions and expenses, where agents were used, came into SKT. After Subhash had lost action no. 1 and had transferred his business to SKTL, Glen's rental income came to SKTL and it was first SKT and then SKTL who decided how the income was to be applied. Within those two organisations, all decisions about Glen were always taken unilaterally by Subhash.

7.4 Other General Evidence

404. At the end of his cross-examination, in the light of his own knowledge of the affairs of Glen and Teso and against the background of the evidence that had been put to him, Mr Shelton was compelled, however begrudgingly, to concede that Subhash had a beneficial connection with Glen and Teso. This emerged from the following exchanges between Mr Shelton and counsel for Party 4:

"Q. Mr Thakrar was asked whether there was no connection but a commercial connection between himself and Teso and he said yes.

Now, as you sit there in the witness box, what is your evidence as to this? Was there or is there any connection other than a commercial connection between Mr Thakrar and Teso?

A. There is a connection, as you know, that he was - for what it is worth until it started - Teso was a dormant company for many years apart from just holding the debenture which I think entitles me to call it a dormant company. And so, Mr Thakrar's connection would have been fairly tenuous with Teso until at least it started doing something.

Q. He is really focusing then on borrowing money from Teso in about 2003 and I am really focusing on that period and your own knowledge as you sit here in the witness box now, whether in the light of all of this evidence that you have been seeing and hearing and reading, if you think there is anything more than a purely commercial connection between Subhash Thakrar and Teso?

A. I think there is more than a commercial connection.

Q. Can you tell his Lordship what you think that connection in addition to a commercial connection is or might be?

A. I think looking at the evidence here, I think that Subhash - or sorry, the Thakrar family, are connected with Teso and/or Glen but I have no idea to what extent and that is my honest judgment.

Q. By connected, do you mean in some beneficial way?

A. It certainly looks as if there is some beneficial connection. The only rider I would give to that is that I am surprised that everyone is saying that Mr Harjivan is the beneficial owner. Because it would appear to me that if the Thakrars do have an interest in Glen and/or Teso, they are taking a tremendous risk." ^[189]

405. It follows that even Mr Shelton believed Subhash and/or the Thakrar family were beneficially connected with Glen and Teso. Given the structure of those companies and the evidence of Ramila and Vijaya, that beneficial connection could only have been with Subhash and the connection must have been a full or one hundred percent connection. This revelation did not come to Mr Shelton for the first time when giving evidence and it is a pity that he did not acknowledge it from the outset. It is also significant that this evidence was given by Mr Shelton prior to any steps being taken by him and his fellow directors to place Glen into administration and contending that Mr Harjivan was the sole beneficial owner and a director of Glen in his own right when the good faith of the decision to place Glen into administration was then challenged by Parties 1 and 4.

7.5 Conclusion – Glen and Teso's Beneficial Ownership

406. The overall conclusion is that Subhash has always been the sole beneficial owner of both Glen and Teso. Mr Harjivan never has been the beneficial owner of any shares in either company and his evidence to the contrary was false and known by him to have been false.

8 The Validity of the Teso Charges

8.1 Teso charges over the assets of Glen

407. The Teso charges comprise:

(1) The debenture dated 11 November 1996 and the further charges granted by Glen to Teso in respect of the properties registered in its name;

(2) Charges dated 25 October 1996 and 28 October 1996 granted by Ramila to Teso in respect of the properties registered in her name as set out in Part D to the 2 August 2006 Order; and

(3) A charge dated 11 October 1999 granted by Vijaya to Teso in respect of the Springfield Road properties and the further charges granted by Vijaya to Teso in respect of the properties registered in her name that are set out in Part D to the 2 August 2006 Order of the Technology and Construction Court which were identified in Appendix E of the Glen Properties Report.

408. The evidence of the nominal directors of Glen and Teso, and the contemporary statements of Subhash himself when Teso was formed and the charges were created, was that the only purpose of the Teso charges over the assets of Glen was to protect the assets of Glen from third Party claims. This was to be done by artificially creating the impression that Glen had little or no free assets because its assets were to be shown in its filed accounts as being matched by equal or greater liabilities that were secured by prior legal charges. The "loans" which the Teso charges purported to secure were not in fact loans from Teso to Glen, but the "shareholder's loan account", which was an accounting device whereby the owner of Glen put, or purported to put, assets into the Glen.
409. Teso's bank statements and the board minutes of Glen and Teso indicated that funds were passed between Glen and Teso which were described by Mr Barby as "inter-company loans" and which were expressed in the minutes to be "interest-free and repayable on demand". A schedule exhibited to Mr Barby's third witness statement showed that were was a net balance due from Glen to Teso of £564,300 as at 28 January 2005.^[190]
410. However, as the owner of Glen and Teso was one and the same person, the "loans" merely represented money owed by the owner to himself. In other words, the loans were simply another accounting device created and inserted into the accounts by Subhash. From the owner's perspective, it made no difference whether the net balance of inter-company loans was in favour of Teso or Glen. However, the circularity went beyond this. Since, as Mr Shelton informed the Court, Teso did not trade, had no real assets and no real income and had never traded and never had had any real assets or income, Teso could not itself have been the source of the inter-company "loans" made to Glen.
411. Although there was no evidence as to what the source or sources of these "loans" were, the inference that I draw is that ultimately they were generated by Glen, being the only company which did have assets. The only possible source of these payments was the rental income generated by Glen's properties and I also find that that is the source of the income.
412. The role played by Teso and the fiction of the Teso charges is further demonstrated by Subhash's letters to solicitors that demanded that they ensure that charges in favour of Teso were registered over all of Glen's properties. Thus, in Subhash's letter to Bates Travers dated 30 January 2004 on behalf of Glen, he stated that it was their duty and the duty of Glen to charge Glen's properties to Teso and that

"The Company has serious risk of losing substantial amount of properties, and other difficulties that could be created for it by not being active and careful in protecting the Company's assets"

413. Subhash's instructions as to the purpose of creating inter-company charges over Glen's assets were repeated in his letter dated 30 September 2004 to Edward, Oliver & Bellis:

"Further to our firm's instruction on behalf of [Glen] our clients, we are rather surprised that this matter has not progressed in spite of various reminders and assurances given …

There is a very serious danger that other Parties could start to create problems and the clients' i.e. [Glen] could end up loosing properties or have to pay costs, which could be very serious sums of money.

…

PS. Please do not forget to put [Teso's] Debenture on these properties, as agreed and discussed previously."

The Teso charges over the assets of Subhash and other Thakrar Family Members

8.2.1 Introduction

414. The purported deeds of mortgage between Subhash and Teso ("the Subhash charges") were dated respectively 21 August 2003, 21 August 2003, 11 December 2003 and 5 July 2004^[191]. According to Mr Barby, the amount outstanding to Teso from Subhash as at 26 July 2005 was £1,501,040.00. However, Mr Barby admitted when giving oral evidence that this figure, and the other loan figures set out in his witness statement, were supplied to him by Subhash by fax or e-mail for the purposes of producing the list of Teso's assets that Mr Barby had been ordered to produce and that these Subhash figures were contained in a one-page schedule that simply set out global amounts without any breakdown.^[192]
415. The Subhash charges were granted over properties in which Subhash had a legal or beneficial interest. The properties in questions are set out by Title Number at paragraph 2 of the order of the TCC dated 2 August 2006. By that order, the TCC declared that the Subhash charges were spent and/or of no effect and made orders for the registers of title of Subhash's properties to be rectified accordingly. The Thakrar Family members' charges were granted over properties in which one or more of Parties 8 – 13 had a legal or beneficial interest. These properties are listed in Part B to the schedule to the order. No summary order was made in connection with these properties. The same considerations apply to these so that this judgment is concerned to explain and provide reasons for the summary order made on 2 August 2006 in relation to the Subhash charges and to find facts relevant to applications to rectify the registers of title in connection with the Thakrar Family members' charges.
416. The reasons and relevant facts are set out in sections 8.2.2-8.2.6 below.

8.2.2 Role of Teso exactly the same in relation to Subhash's and Thakrar Family members' properties as it was in relation to Glen's properties

417. Teso was merely a vehicle devised to deter third party claims against the assets of Glen. This was to be achieved by the device of Teso taking charges over the assets of Glen for which it had provided no real consideration. Thus, when Subhash and the Thakrar Family members provided charges which Teso took over their properties, the obvious starting point in considering whether these charges secured any genuine indebtedness was the same as with the Glen charges. In other words, since the charges appeared to have been created in identical circumstances and in an identical manner to those created over Glen's properties, they were probably created as a device to prevent the Claiming Parties from enforcing their costs judgments in favour of those Parties.
418. Mr Shelton said in cross-examination:

"Glen had the assets … Teso … had no income … had no real assets".^[193]

Accordingly, if Teso had no income and no assets, it did not have the means to advance monies to Subhash. This fact, together with the evidence referred to in sections 8.2.3-8.2.6 below, clearly demonstrates that the Teso charges over Subhash's properties were, like its charges over Glen's assets, merely a device to protect Subhash's assets against the claims of genuine creditors.

8.2.3 Subhash arranged for Teso to take charges over the properties registered in his and his brothers' names

419. Mr Shelton's evidence was that it was quite likely that the suggestion that Subhash grant the Teso charges came from Subhash himself and he agreed that such a request on the part of the borrower "was not logical". Mr Shelton also accepted that it could be the case that the purpose behind the Teso charges "was simply to protect Subhash's assets from third party creditors, including those involved in litigations". Mr Shelton was not surprised that Subhash gave instructions to Teso's solicitors regarding the Teso charges.^[194]
420. In finally resolving this issue, I must rely on the contents of the contemporaneous documents since, apart from Mr Shelton whose knowledge was limited, there was no first-hand evidence regarding the circumstances in which Teso came to take charges over Subhash's properties. Subhash himself declined to subject himself to cross-examination and he put in no sworn evidence on this issue.
421. The documents demonstrate that:

(1) Subhash identified what properties were to be given to Teso as "security".

(2) Subhash dictated the final form of Teso's instructions to solicitors regarding the Teso charges, in particular the timing of the loan and the rate of interest. The timing was that part of the loan had been made "over the last year" but "further funds [Subhash] may also draw down from us" and the rate of interest was to be 2% over Bank Base Rate.

(3) Subhash dealt with Teso's solicitors, Mr Deepak Manghani of Radcliffes Le Brasseur, regarding the Teso charges.

(4) Subhash pressed the solicitors to get on with the taking of the Teso charges with the instructions: "Charges to be taken as soon as possible. Time is of essence" and "Would you please therefore, put Charges on [my home and the Office] as first Charges for Teso … as soon as possible".

(5) Subhash wanted charges to be taken by Teso not only over his own interest in the properties but also over the interests of his brothers and gave the necessary instructions for these charges to be taken out.

(6) Subhash regarded these charges as affording protection to him and his brothers. His views about the benefits of his brothers taking charges are clearly set out in this letter that he drafted, a copy of which was found on his hard drive:

"Regarding my brothers, Mukesh, Vijay and Kishore the two properties where they have interests, which is my Office as well as Taylors Building, but the third property i.e. in Clipper Court Mukesh, Vijay, Mrs J M Thakrar and myself have interest. Perhaps we should do a separate agreement between them and Teso … for their share of £200,000 worth of loan to be covered so that they are also not left with any difficulty." (emphasis added)

and in another document:

"We should also be able to protect my Brothers i.e. MK, VK and KK Thakrar, as joint owners with me. Can you please somehow include them in the Loan Agreement, if necessary, so that it is clearly protective of them, also." (emphasis added).

(7) Subhash's views about his brothers are also set out in his letter to Radcliffes Le Brasseur dated 10 May 2004 regarding the taking by Teso of further charges over the properties in the names of his family members:

"We shall appreciate if you will please take first Charges on all these properties in favour of Teso, who have lent substantial monies to the above … secured Charges need to be placed on all of these above properties as soon as possible. Time is of essence. The above individuals do not need independent legal advice and they have asked me to confirm it as we as a family have advised all of them".

422. The question arises as to who it is from whom Subhash and his brothers wish to be protected that necessitates these charges. The obvious, indeed only, inference that can be drawn in answer to this question in the light of the circumstances of these charges being taken out, is from creditors of Subhash and his brothers who might otherwise seek to recover against their properties.
423. Subhash, in a letter drafted for his wife Kiran to send, remonstrated in February 2005 with Mr Laffoley for his failure and the failure of the solicitors instructed on behalf of Teso to perfect the Teso charges. It is telling that in his letter in reply, Mr Laffoley did not express any concern at all about the failure to perfect the Teso charges, but was most concerned to respond to the accusations made against him by Subhash, which he did in the following terms:

"It was Subhash who dealt directly with Radcliffes LeBrasseur and then P S Levy & Co concerning the charges he wished Teso to take over the various properties owned by the Thakrar family. It was Subhash who instructed these solicitors, it was Subhash who 'fell out' with these solicitors and it appears that it was Subhash who totally ignored their advice".

8.2.4 Teso did not in fact advance any monies to Subhash or his brothers

424. The simple but remarkable fact is that there is no evidence that Teso ever actually made any payments to Subhash, whether by way of loan, gift or otherwise, after December 2001. Thus Mr Barby's evidence was that:

"I have not been able to find any record in Teso's bank statements of any funds passing by way of loan from Teso to [Subhash] pursuant to [the] loan facility."^[195]

425. Mr Barby did refer, in paragraph 11 of this witness statement to four sums paid by Teso to SKT's client account in October-December 2001 but he added:

"These transfers pre-date the grant of the loan facility. Further, there is nothing to indicate that these sums were advanced to [Subhash] by Teso by way of a loan."

8.2.5 Neither Subhash nor his brothers made any "repayments" until after judgment against him

426. The Loan Agreement the Teso charges were supposed to secure provided that the principal amount of the loan outstanding from time to time would carry interest at the rate of 2% above base rate payable quarterly in arrears at the end of March, June, September and December in each year. Subhash made no payments in any of September 2003, December 2003, March 2004 or June 2004. No demand was made upon Subhash by Teso for payment of interest or breach of the loan agreement. No attempt was made by Teso to exercise its remedies as "mortgagee". The same failure to make repayments occurred with Subhash's brothers.
427. Subhash apparently read the draft judgment following the original trial on or about 3 September 2004. Thereafter he took steps to realise his assets that were not subject to the Teso charges and pay them to Teso or to Anchor Trust. Five payments were made between 17 September 2004 and 1 October 2004.^[196] Given the timing of these payments, they cannot sensibly be regarded as having been loan repayments by Subhash. They were made by Subhash in yet further blatant attempts to avoid his genuine creditors.

8.2.6 No loans were made to Subhash or his brothers by anyone

428. The evidence also demonstrates that, not only did Teso make no payments to Subhash or his brothers by way of loan, nor did Glen make any loan payments to him or them. I reach this conclusion and make that finding from the following matters and circumstances:

(1) Although payments totalling £1,270,075 were made by Glen to SKT between 5 September 2002 and 24 July 2003, no terms of loan had been agreed between Glen/Mr Shelton and Subhash either in writing or orally;

(2) The idea that Glen might support Subhash with his personal legal and professional costs originated in a letter dated 24 July 2002 which Subhash drafted for Mr Shelton to send to him. The letter does not suggest that the support was to be given by way of a loan. No terms of loan, either as to date of repayment or rate of interest, were given. On the contrary, the support offered was open-ended:

"We have recently sent £50,000 to Paul Robinsons, Solicitors on account of legal and professional fees, and will further support you, if needed" (emphasis added)).

(3) This non-loan basis of funding Subhash's legal costs was also referred to in Subhash's letter to Mr Shelton dated 15 August 2002 requiring the urgent payment to Paul Robinson, his solicitors during trial no. 1, of a further £20,000. Mr Shelton did not recall having seen Subhash's draft before but he did not deny that he said to Subhash that Glen would send further monies after the £50,000 referred to in sub-paragraph (2) above.^[197]

(4) Mr Shelton's explanation for these payments was that Subhash had told him that the beneficial owner of Glen was happy, because of Subhash's services to the company over the years, for Glen to lend him money in his on-going litigation. This explanation provided yet another example of Subhash's Jekyll and Hyde existence in relation to Glen's affairs that arose from Subhash simultaneously acting for himself and as the attorney for his shadow.^[198]

(5) Mr Shelton could not say upon what terms the sums of £50,000 and £20,000 were transferred to Subhash's solicitors and confirmed that there existed no record of any agreement setting out the terms on which these monies were transferred.^[199]

(6) The payments of £50,000 and £20,000 did not appear as loans on the bank statements of Teso exhibited by Mr Shelton in support of his statement, whereas payments received by Glen from Teso were described as loans on Teso's bank statements.^[200]

(7) Mr Shelton agreed in cross examination that the pattern of behaviour that developed between Subhash and Mr Shelton was that Subhash would tell Mr Shelton how much money he wanted Mr Shelton to transfer to his firm's account and Mr Shelton would simply give effect to those instructions.^[201]

(8) Subhash's instructions did not differentiate between how much Subhash needed to cover expenditure undertaken on Glen's behalf by SKT, how much was to pay Subhash's fees and how much Subhash required for his personal purposes.^[202] As Mr Shelton said in cross examination:

"… the money started off as one thing and then was mixed up later on."^[203]

(9) There were no minutes in Glen authorising the making of particular payments to Subhash by way of loan.^[204]

(10) The payments to Subhash could not be minuted as loans because at the times they were made Subhash:

"… was the only person who knew how much the loans were"^[205] (emphasis added)

(11) Subhash was the only person who could tell Mr Shelton how much Subhash had "borrowed" from Glen. Glen kept no account of the monies used by Subhash for his own purposes. Subhash alone kept the account.^[206]

429. This evidence overwhelmingly supports my conclusion that neither Teso nor Glen made any payments to Subhash or his brothers by way of loan. I reach this conclusion despite Mr Shelton's suggestions to the contrary in his written and oral evidence. That evidence was yet another example of Mr Shelton deliberately turning a blind eye to the obvious when giving his evidence.
430. The Court is entitled to conclude from the facts and matters set out above that, on a balance of probabilities, the Teso charges are a mere device and may be disregarded.

8.3 Conclusion – Teso Charges

431. The Teso charges were a sham from their inception. They do not support any borrowing by Glen. There has been no lending to support these charges. They may be discharged forthwith.

9 Which Transactions Involving Glen and Teso are Void or Voidable?

9.1 1987 Agreement and 1988 Transfer

9.1.1 Introduction

432. The starting point for any determination of the claims of any Party against properties currently registered in Glen's name or of tracing, restitutionary or monetary claims against Glen is to determine whether the Agreement for sale of SPC's property portfolio to Ramila ("the 1987 Agreement") and the Transfer of SPC's property portfolio to Ramila dated 25 March 1988 ("the 1988 Transfer") were void and/or of no effect
433. There was no written contract for the sale of SPC's property portfolio to Ramila. An oral agreement for sale was made at a meeting between Subhash, Neil and Kenneth on 12 November 1987. It was evidenced by a letter dated 17 November 1987 addressed to Mr Roger Smith at Claremont Haynes and it was executed by Neil and Kenneth ("the Sale Memorandum"). A copy of the part of the 1988 Transfer signed by Neil and Kenneth is at [D1(3)/19B/1615-1620]. A copy of the part of the 1988 Transfer signed by or on behalf of Ramila has never been disclosed. However, Subhash's evidence at the original trial was that he signed the 1988 Transfer as Ramila's attorney.
434. Both the 1987 Agreement and the 1988 Transfer are alleged by Party 2 to have been void and of no effect because (1) they were made without the authority of SPC and (2) they were made without the authority of Ramila.

9.1.2 No authority from SPC

435. The directors of SPC in November 1987 and March 1988 were Kenneth, Rosemary and Mr David Eley. Neil was the company secretary. The day-to-day running of the company was left by the directors to Neil. Kenneth's evidence regarding the 1987 Agreement and the 1988 Transfer was that:

"Neil made the decision that all of [SPC's] properties had to be sold and he and [Subhash] agreed the price and method of payment and handled all the arrangements. The Company did not authorise Neil to make that arrangement with [Subhash]. No meeting of [SPC] was called at which the shareholders resolved that the sale should go ahead, or ratified it afterwards. There was not even a meeting of the Board of Directors to approve the sale, or to recommend it to [SPC's] shareholders. I know that Neil and/or [Subhash] manufactured Minutes (which I, at his behest, was stupid enough to sign …) to make it look as though everything was regular, but, in fact no meetings were ever convened. I do not believe that any members of [SPC], other than Neil and I, were even aware of the sale at that time."^[207]

436. Kenneth signed the 1987 Agreement and the 1988 Transfer because Neil and Subhash advised him to do so and Kenneth did not feel able or competent to challenge their advice. Further, according to Kenneth, it was Subhash who drafted:

"… most if not all of the Minutes of SPC between his advent in 1987 and his departure in 1996." ^[208]

Although the Minutes purported to record Rosemary as being present, in fact Rosemary had not attended any of meetings until after Neil's death in January 1995.

437. Rosemary's evidence is that she:

"… was not involved in the proposal to sell the properties and … only became aware that [SPC] had been wound up after the event. …

I was not aware that [SPC's] property portfolio had been sold until after July 1988 … I was given no formal notification of the sale price or that it was to be paid in instalments. I do not recall when I learned of the actual sale price … I only became aware of the actual terms of the agreement to sell (including the size of the portfolio) when I was shown a copy of the document after these proceedings had started in 1996. I had no idea what the portfolio was actually worth. I was not consulted over the sale and I did not discuss the matter with Neil, Kenneth or any other family member or shareholder at the time."^[209]

438. As regards the actions of Neil and Subhash, Rosemary's evidence was:

"I trusted Neil as a member of the family and as the company solicitor to act with honour and integrity in all matters. I had no idea that he was manipulating myself and Kenneth to help him strip the company. I also trusted [Subhash]. He appeared to be a very good friend of Neil's and was a well-known and experienced accountant. I expected that both men would act with honesty throughout and I had no reason to think otherwise until these proceedings were brought."^[210]

Further, Rosemary confirmed that she had not been invited to attend, nor had attended, a board meeting of SPC between 1987 and Neil's death in January 1995.

439. Neither Kenneth's nor Rosemary's evidence was challenged by Subhash, Ramila, Vijaya, Glen, Teso or Mr Harjivan at trial no. 2. The upshot of their evidence is that the sale of SPC's property portfolio, purportedly effected by the 1987 Agreement and the 1988 Transfer, was never authorised or ratified by a resolution of the board of directors of SPC passed at a meeting of the board or otherwise or by a resolution of the shareholders of SPC passed at a general meeting of the company or otherwise. Neither Neil nor Kenneth had the authority of the board or of the company to execute the Sale Memorandum or the 1988 Transfer on behalf of SPC and neither the Sale Memorandum nor the 1988 Transfer was ever ratified by the company.

9.1.3 No authority from Ramila

440. Ramila's evidence was, in summary and contrary to Subhash's evidence at trial no. 1, that she:

(1) had never heard of Neil or Kenneth or SPC;

(2) was not asked by Subhash in November 1987 whether she would be interested in purchasing a number of properties in London for a price of £980,000;

(3) could not have afforded to pay or raise the purchase price of £980,000 in November 1987, at a time when she was living in Tanzania;

(4) was not asked by Subhash in November 1987 whether she would be interested in purchasing property for development;

(5) she did not ask Subhash in November 1987 to raise an urgent loan of £300,000 for her in order to purchase a property portfolio;

(6) did not authorise Subhash to use the monies that he was holding for her to pay a tax demand made on SPC by the Inland Revenue;

(7) was not sent a copy of the Sale Memorandum in November 1987 and had never seen a copy of it until her intervention in these proceedings;

(8) Was not told by Subhash in November 1987 that he had entered into the 1987 Sale Agreement on her behalf;

(9) had never spoken to Subhash about the 1987 Sale Agreement not even on the telephone;

(10) did not ask Neil to instruct Roger Smith of Claremont Haynes as her solicitor and she had never heard of Claremont Haynes;

(11) was not sent a copy of the 1988 Transfer in March 1988 and had never seen a copy of it in her life;

(12) would not have been able to pay or raise £293,000 each year for three years, starting in 1988. In 1988 she was living with her sister in Tanzania and did not even have a property of her own; she had no job but helped her sister around the house; she had no savings of her own in Tanzania and apart from the money that, until 1984, she had sent to Subhash from the family shop-keeping business in Tabora, she had no savings at all;

(13) was not told by Subhash in March 1988 that he had executed the 1988 Transfer in her name as her attorney

(14) when asked how she would have felt if Subhash had told her in 1988 that he had committed her to make payments of £293,000 each year for three years, her answer was:

"I would get a shock and my blood would boil that I trusted him and he has betrayed me and if you are then in my place, what would you do? How would you feel?" ^[211]

(15) was not living at her brother Nilesh's property in England between November 1987 and March 1988, but with her sister in Tanzania, and Subhash did not consult her or seek her instructions concerning the purchase of the property portfolio, and could not have done so, for the simple reason that her sister did not have a telephone.^[212]

441. None of the answers given by Ramila in the passages of her evidence referred to in the preceding paragraph was challenged by any other Party to the Thakrar Litigation save for Subhash's last minute and wholly unsubstantiated challenge to her evidence as being perjured and lying, a challenge that I have expressly rejected as itself being dishonest and untruthful evidence slipped into the trial as a result of Subhash's misusing the limited permission granted to him to adduce evidence to challenge the evidence adduced by Party 1 that he was the source of the funding of a payment of £20,000 ostensibly provided by Mr Harjivan to fund the appointment of the putative administrators of Glen prior to their obtaining access to its income stream.
442. Further, the properties transferred to Ramila from SPC were retained in her name for less than a year. By an agreement for sale dated 30 March 1990 purportedly executed on her behalf by Subhash as her attorney, Ramila agreed to sell the ex-SPC properties to Glen in return for a stated consideration of £1 million and the issue of 250 shares in Glen. Within 8 months the shares in Glen issued in Ramila's name were transferred into the name of Vijaya. Ramila never received one penny of the £1 million purportedly due to her under the contract with Glen nor one penny from Vijaya for her shares in Glen.
443. Ramila's own conclusion about the events that had happened concerning her alleged purchase of SPC's property portfolio was forcibly expressed by her as follows:

"I have never come to know nor was I ever asked about or told about the amount for purchasing the property portfolio and I will repeat, but you will say that I am keeping on repeating but that is the fact: my name has been misused, my power of attorney has been misused in fraud and now I can say that SKT is not a company of accountants. It is a company where fraudulent work is done. Tons and tons of fraudulent paperwork is done.

I am the most uneducated person over here but others are highly educated; barristers, lawyers, the honorable judge. They can see how fraudulently documents are being made in that company.

Three main points of mine have been misused: firstly, I am uneducated; second, I do not have money, what can I do to them and thirdly, they keep changing solicitors and barristers daily because they are millionaires and they thought that I do not have money so I cannot follow up or cannot do anything and third, they took advantage of my health, which report I have given."^[213]

444. Ramila's allegation set out in this passage of her evidence is supported by the surrounding facts and circumstances and I unhesitatingly accept it in its entirety. In purporting to create legal relations between Ramila and SPC in circumstances where it is plain that Subhash was acting for purposes of his own and, by plain inference, for his own benefit, Subhash was acting and exercising his powers under Ramila's power of attorney in bad faith.

9.2 1990 Sale Agreement

445. Party 2 contended that the Agreement for sale of ex-SPC properties between Ramila and Glen dated 30 March 1990 ("the 1990 Sale Agreement") was void and/or of no effect
446. A copy of the part of the 1990 Sale Agreement executed by Subhash as attorney for Ramila was adduced in evidence. The part of the 1990 Sale Agreement executed on behalf of Glen has never been disclosed.
447. If, as is inevitable given my findings of fact, the title to SPC's property portfolio did not pass from SPC to Ramila and the 1987 Agreement and the 1988 Transfer were ineffective to vest any legal or beneficial interest in those properties in her, Ramila had no title to pass to Glen in respect of the properties that were the subject-matter of the 1990 Sale Agreement. The 1990 Sale Agreement was therefore ineffective to confer title to the properties referred to in it to Glen and SPC remains the legal and beneficial owner of those properties.
448. Independently of the fact referred to in the preceding paragraph 434, the 1990 Sale Agreement was in any event void and/or of no effect because:

(1) it was made without the authority of Ramila and in purporting to execute it as Ramila's attorney Subhash acted in bad faith; and/or

(2) Glen neither intended to furnish good consideration to Ramila for the properties referred to therein nor in fact furnished good consideration to Ramila for the same.

449. The promise contained in the 1990 Sale Agreement to pay £1 million to Ramila and/or to issue to her 250 shares in Glen was illusory because:

(1) Glen, by its directing mind and will Subhash, never intended that Ramila should receive that sum or any part thereof;

(2) though 250 shares in Glen were issued in the name of Ramila, Ramila was never informed by Glen or Subhash that she had been issued with those shares or was the co-owner of Glen;

(3) without any dividend having been paid or distribution made in the meantime, within 8 months the shares were transferred into the name of Vijaya without Ramila's knowledge or consent and without any payment being made to Ramila therefor; and

(4) Subhash, as her purported attorney, never accounted to Ramila for the acquisition of the properties or shares ostensibly on her behalf nor for any benefits obtainable from those shares and Ramila was never notified of her interests obtained by her ostensible attorney on her behalf and therefore never ratified the acts taken without her authority on her behalf.

450. Ramila's evidence was that, contrary to Subhash's evidence at trial no.1, she:

(1) was not advised by Roger Smith of Claremont Haynes or Subhash to consider forming an offshore company to shield her from UK inheritance tax.

(2) knew nothing about the formation of Glen.

(3) had no knowledge that the ex-SPC properties unsold as at 30 June 1989 were purportedly transferred from her name into the name of Glen for £1 million.

(4) had no knowledge that in consideration for the transfer 250 shares in Glen were purportedly issued to her and 250 shares to her sister Vijaya.

(5) at this stage in her answers she requested the Court (and was granted) permission to give an additional reply:

"I do not know anything about this, nor was I told about it and, if Subhash had come here on Tuesday, I would say: why was he not asked all of this and why did he not say all of this; why did he not answer these questions because he is a cheat and if there is justice, then he should be put in prison, because he has done all fraud."^[214]

(6) had never received a copy of the agreement to transfer the ex-SPC properties to Glen, and in fact had never seen it prior to being shown a copy in the witness box. Her evidence was trenchant:

"There is no question about me remembering because I was not involved in this and I do not know about this and this topic never came up. Because Subhash has signed here as my attorney, you can now see very clearly that he has misused my power of attorney."^[215]

(7) did not receive any part of the stated purchase price of £1 million:

"I have not received a single penny but they should prove to the Judge - the honourable Judge that whether, if they have paid, then which account it has come from, which account it has gone to, they must prove that." ^[216]

(8) did not receive any money from her sister Vijaya for any shares in Glen. Again her evidence was trenchant:

"A. There is no question about it because you have seen in the video link whether my sister Vijaya has any money or not; millions of pounds! And it was very clear.

Q. You did not receive half a million pounds from Vijaya for the shares in Glen?

A. Forget half a million. I did not get a single penny. So there is no question about half a million."^[217]

(9) did not recall lending or agreeing to lend to Glen the "purchase price" of the properties transferred to Glen by way of "shareholder's loan".

(10) had not received just under £½ million since February 2000 notwithstanding that, according to a document produced by Subhash in February 2000, £476,000 of the purported purchase price of £1 million was still outstanding as at 28 February 2000.^[218]

451. Ramila's was evidence entirely corroborated by her sister Vijaya's evidence.^[219] Vijaya had no recollection of (a) being issued with any shares in Glen (b) acquiring any shares in Glen (c) paying any monies for shares in Glen (d) paying to Ramila just under £½ million on or about 30 March 1990 and/or (e) a further sum of similar amount in November 1990 and/or (f) or any sums of such amounts at any time.
452. None of the answers given by Ramila or Vijaya in the passages of their evidence I have set out above was challenged by any other Party to these proceedings save for the intemperate challenge made by Subhash on the last day of the hearing which I have unhesitatingly rejected.
453. In purporting to create legal relations between Ramila and Glen in circumstances where, as is plain from the evidence of Ramila and Vijaya already referred to, Subhash was acting for purposes of his own and, by plain inference, for his own rather than Ramila's benefit, Subhash was acting and exercising his powers under Ramila's power of attorney in bad faith.

9.3 Subsequent transfers of ex-SPC properties executed by Ramila

454. I am also concerned with the subsequent transfers of ex-SPC properties that were executed by or on behalf of Ramila. Party 2 contends that these transfers are void and/or of no effect.
455. The copy documents disclosed by Mukesh suggest that Ramila executed a number of Transfers subsequent to the date of the 1990 Sale Agreement ("the Subsequent Transfers"), namely Transfers dated 18 September 1991, 27 July 1993, 27 July 1993, 4 October 1996 and 1998.
456. It was not clear why these documents were disclosed by Mukesh rather than by Glen when, on their face, they purport to be documents belonging to Glen. According to a letter from the solicitors previously acting for Parties 8-13, Seddons, to Speechly Bircham, Party 4's solicitors, dated 5 December 2005 these documents were supposed to have been found by their clients in:

"… various old (and closed) files … hidden away in the basement."

Ramila's evidence was to the effect that she had no memory of signing these documents, might indeed not have signed them and never had any explanation as to what the documents were or why she was being asked to sign them.

457. These properties or a majority of them, being ex-SPC properties, are now registered at HM Land Registry in the name of Glen. This suggests that further Transfers were executed in favour of Glen, either by Ramila herself or Subhash purportedly acting as her attorney or as the attorney of Vijaya.
458. The properties in respect of which Party 2 claims it either remains the legal and beneficial owner or, where they have been sold to genuine third Party purchasers, is entitled to trace the proceeds of sale into Glen, are properties nos. 10-110, 114 & 142 on the List of Properties Under Challenge and are set out in a schedule to this judgment. A Transfer dated 18 September 1991 purported to transfer the Springfield Road properties to Vijaya. However, the Glen Properties Report shows that these properties are currently registered in the name of Glen and that they were transferred from Vijaya on 20 September 1999 for nil consideration. These properties are also claimed by Party 2.
459. It follows from section 9.1 above that title to SPC's property portfolio did not pass from SPC to Ramila and that the 1987 Agreement and the 1988 Transfer were ineffective to vest any legal or beneficial interest in those properties in her. It therefore follows that Ramila had no title to pass to Glen in respect of the properties the subject-matter of the Subsequent Transfers. The Subsequent Transfers were therefore ineffective to confer title to the properties referred to therein on Glen and legal and beneficial title to the same remains in SPC.
460. Independently of the fact referred to in the preceding paragraph 446, there is evidence that the Subsequent Transfers were in any event void and of no effect because: (1) when executing the same Ramila's mind did not accompany her signature, so that she never intended to sign the Transfers to which her name was appended^[220] and/or (2) she did not sign in the presence of a witness who attested the signature^[221] and/or (3) her signature was forged on the relevant documents^[222].
461. Thus, the Subsequent Transfers would appear to be ineffective or void and failed to pass title even if, which would be contrary to the evidence, Ramila had good title passed to her in the first place.

10 Factual Background to Trial no. 1 and the Compromise of SPC's Claims Brought Against Ramila and Glen

462. The factual background to the compromise reached between SPC and Glen is as follows.
463. 1996 - 1999. Birkett Long, solicitors, acted for Glen, Ramila and Vijaya on a number of matters involving the properties held by or on behalf of Glen. The initial instructions were given by Subhash pursuant to a general retainer letter that was to apply to all matters that Subhash instructed Birkett Long to deal with.
464. The instructions in each case were always given by Subhash. In Ramila and Vijaya's cases, pursuant to the powers of attorney each had provided to Subhash. Mr Livesley, the file holder in these matters, and other members of Birkett Long never met Vijaya or Ramila and Subhash's express and explicit instructions were that the firm should never attempt to contact them directly in Tanzania or Kenya respectively where Subhash informed Birkett Long that each was living. Instead, as Subhash instructed Birkett Long, that firm should always communicate with him about these instructions and, additionally, about the instructions given to Birkett Long on behalf of the other family members.
465. Mr Livesley, the partner in question, stated that, to the best of his knowledge and recollection, the firm contacted each principal for specific authority in order to validate the power of attorney when first being instructed for a principal through a power of attorney. He remembered that, for Vijaya, a letter was received from her instructing the firm that Subhash was her attorney and that no other direct contact was made with her. He could not remember whether such a letter was also received from Ramila or whether contact had been made in some other way. Both Vijaya and Ramila gave evidence that they never contacted Birkett Long nor were contacted by that firm in any way and I accept that evidence.
466. It is quite likely that Mukesh, Vijay, Naina and Sheela either provided letters of introduction or even spoke on the telephone since each was aware that the action started in their name was about to be started. In each case, that Family member merely accepted what Subhash would have told them, namely that he was starting proceedings in their name as a necessary step in relation to the property held nominally in their name and that they should leave everything to him save, if this happened, signing a letter or speaking to the solicitor on the telephone to authorise the use of their names. In Shantaben's case, it is clear that she was not consulted. Subhash held a general power of attorney and would have signed any necessary letter and he or Sheela would have explained that their mother was not capable of dealing with her own affairs but left everything to Subhash or Sheela.
467. I find that the direct contact between Birkett Long and both Vijaya and Ramila was by means of a letter which appeared to have been written by each to the firm which Subhash provided to Birkett Long. In each case, the letter was drafted and signed by Subhash and was a forgery. Subhash acted in this way so as to be able to start proceedings in both Ramila and Vijaya's names without them knowing about or being contacted directly by Birkett Long in order to further his fraudulent pursuit of money from the Estate of Neil for himself in relation to properties held nominally in their names. Proceedings brought by the other Family members were started by Subhash at his suggestion and each family member from the outset left everything to Subhash since they regarded the properties held in their respective names as belonging to Subhash and as being placed in their respective names by Subhash for tax or other purposes dictated by Subhash.
468. 4 December 1996. Birkett Long acted for Subhash/SKT in commencing proceedings claiming unpaid fees from Party 2 on behalf of Subhash in the Colchester District Registry. Party 2 issues a counterclaim seeking an inquiry and damages in relation to the transfer of SPC's property portfolio to Ramila. This counterclaim was the catalyst for Subhash to instruct the issue of the Family actions.
469. August - September 1998. Birkett Long issued the Family Actions in the Chancery Division against Party 4. Each claim was issued in a separate writ. The writs issued in the names of Ramila and Vijaya were issued pursuant to instructions given by Subhash purportedly acting as their attorney under the respective powers of attorney held by him that each had signed.
470. The address given on one of the writs issued in Ramila's name was "C/o 113 Woolwich High Street" and those in Vijaya's name was "PO Box 78, Kisumu, Kenya". These addresses had been given by Subhash. In the case of Ramila, Subhash knew Ramila's actual address in Mottingham which address was given on one set. Following April 2000 he gave his own business address so as not to reveal her address.
471. 24 May 1999. The corporate manager of the Bank of Wales wrote to Mr Shelton following a meeting he had had with Subhash and Mr Shelton a few days earlier. The purpose of the meeting was to discuss the facility that the Bank could offer Glen and in the course of that discussion Subhash represented himself to the corporate manager in this way, as described by him in his letter to Mr Shelton:

"I am exceptionally keen to develop more business with Glen and am extremely grateful for the opportunity to meet directly with Mr Thakrar on Friday last. During our conversation it became apparent that Mr Thakrar, individually and through Glen, is a man of some substantial wealth owning (I believe was mentioned) properties valued at c £35m with the only borrowing being our small facility and I understand about £500,000 elsewhere."

472. The letter went on to suggest a trading facility of up to £5m could be provided by the Bank.
473. I find that Subhash held himself out as being the beneficial owner of Glen's property portfolio and, in consequence, of Glen itself. He did so on an occasion when he is to have been expected to be telling the truth since he was discussing facility of up to £5m from the Bank of Wales to enable Glen to undertake further acquisitions and refurbishment. He also informed the corporate manager that Glen's current borrowing was only about £500,000. This information, again, was likely to be accurate given the circumstances in which it was provided. That meant that Glen did not in fact owe many millions of pounds in shareholders' loans despite the suggestion to this effect in its accounts when they were prepared by Subhash subsequently. Thus, Glen in 1999 had no outstanding debts owed to Teso or Harjivan or Ramila or Vijaya.
474. Subhash questioned Birkett Long's handling of Glen's business and their professional integrity, competence and the fees being charged and Birkett Long decided that their professional relationship with Subhash, Glen and Vijaya had broken down.
475. 24 September 1999. In accordance with established professional etiquette, Birkett Long wrote directly to Vijaya in Tanzania and terminated their retainer with her on the grounds of a breakdown of the professional relationship and for non-payment of fees.
476. Vijaya was most surprised to receive this letter since she had never heard of the firm nor was aware of any business in England that she was concerned with that had needed the involvement of solicitors to act on her behalf nor, indeed was she aware of any business of any kind in England that she was involved in. Vijaya telephoned Subhash in England and asked him what the letter was all about. He merely told her that there was nothing to worry about and that she should burn the letter. He also told her that she should burn any further documents that might arrive. He also informed her that he was going to send her £10,000 to help fund any of her children's education and he subsequently arranged for £5,000 to be sent to a bank account opened by Vijaya for that purpose. Vijaya had not asked for this money.
477. I find that Subhash sent Vijaya this money at this moment in order to "sweeten" her and to seek to ensure that Vijaya did not do anything or inform anyone about this letter and any subsequent letters that she might receive from Birkett Long. It is also clear that this money was extracted from Glen by Subhash.
478. 12 January 2000. Subhash wrote a threatening letter to Mr Livesley of Birkett Long. In this letter he informed Mr Livesley that Vijaya had contacted him and had expressed alarm and fear that the letter had been sent to her direct by Mr Livesley. It was suggested in Subhash's letter that letters from overseas were often opened by the Kenyan authorities and that if a letter contained anything of a business or financial nature, the intended recipient would often be threatened by the authorities with violence due to their jealousy of those with overseas assets. The letter then stated:

"… You cannot put people's lives at risk and behave badly as you have do so even now and on her instructions, we have been asked to warn you that you and your personal family will also suffer the consequences if they are harmed … so please take note very seriously indeed what our client has said via us. We do so reluctantly but on her specific instructions."

479. The letter also threatened Mr Livesley with having to "personally pay the price of it" if anything happened to Vijaya or her family.
480. The statements in the letter were lies. Vijaya had not spoken to Subhash about any risk or threat to her or her family resulting from the letter being sent to her and her evidence was that there was in fact no threat to her of the kind suggested by Subhash and she had had no concern about the letter being sent to her. She certainly had not instructed him to complain to Birkett Long about the letter being sent to her.
481. Birkett Long made a complaint of professional misconduct against Subhash about this letter and it led to a finding by the Disciplinary Committee of the Institute of Chartered Accountants. This complaint was proved on 8 May 2001 after Subhash had admitted it. The tribunal found that there was no evidence to show that the solicitors had in fact placed Vijaya in any danger. Subhash was fined £3,000 and ordered to pay costs of £2,326.
482. I find that this letter was, in fact, a crude attempt to try and ensure that Birkett Long did not further communicate directly with Vijaya and, thereby, discover his fraudulent use of Vijaya's name.
483. 14 January 2000. Bowling & Co replaced Birkett Long as solicitors for the Thakrar Parties including Subhash.
484. March 2000. The properties still registered in Ramila's name were transferred into Glen's name by Bowling & Co. These properties had not been re-registered into Glen's name earlier because Subhash had wanted to save on stamp duty.
485. I find that Subhash gave instructions for these properties to be re-registered from Ramila's name some years after they had been transferred to Glen as part of his hastily formed plan to place every property then in Ramila's name into Glen's name because he had been frightened by recent events that his fraudulent use of his cousin's name might be discovered and he wanted to "regularise" the conveyancing of the alleged bona fide arm's length sale by Ramila of her properties to Glen.
486. 27 June 2000. Subhash sent a complaint about Mr Livesley of Birkett Long to the Office of the Supervision of Solicitors in the name of Vijaya from her address in Kenya. This complaint stated that:

"I am a Kenyan resident national with various UK property and other interests which are administered through my UK representative, namely my maternal cousin, Mr Subhash Thakrar to whom I have granted a general power of attorney.

Unfortunately due to the sensitive political and economic climate in Kenya, it has always been an express instruction to solicitors that all and any written communications must be addressed to my cousin in London who would then seek my instructions by telephone or other safer means via third Parties visiting Kenya or UK. The political and economic climate is such that it is my firm belief that overseas post is often intercepted by the Authorities and/or other powerful Kenyans in positions of authority etc. who seek to use matters to their advantage and to my potential disadvantage.

I understand that there has been a falling out between my cousin and our then solicitors at Birkett Long.

In breach of the express agreement … Mr Livesley of Birkett Long wrote directly to me in Kenya as to confidential financial and business matters. Unfortunately my worst fears were founded insofar as the Birkett Long letter (a copy of which is attached) was intercepted by unknown third Parties such that I then became the victim of intimidation and threats which unfortunately had to be "bought off" by payment of a Stirling equivalent of some £20,000.00."

487. No direct evidence was adduced as to what happened to this complaint so that I infer that it was dismissed. Subhash's letter is remarkable in that it is seeking to secure a disciplinary finding against the solicitor who had reported Subhash to his own disciplinary body in relation to this matter and where a hearing was awaited.
488. I find, on the basis of Vijaya's evidence, that she never wrote this letter and that the letter that was written to the OSS was a forgery written by Subhash. Moreover, the alleged interception of the letter, subsequent intimidation of Vijaya and payment by her to forestall further intimidation or violence were all figments of Subhash's imagination. This letter is another example of Subhash's dishonest attempts to seek to ensure that his dishonesty in relation to the use of Vijaya's name would remain undetected.
489. 15 November 2000. A letter dated 15 November 2000 and purportedly signed by Ramila and stated to come from C/o S.K. Thakrar & Co, Chartered Accountants, 113 Woolwich High Street, Woolwich, London, SE18 6DN, was sent to Mr Raja of Bowling & Co purporting to instruct Bowling & Co. The letter included this statement:

"… I had disposed off (sic) my property portfolio to Glen International Ltd on 1 June 1989 and also sold some of my shareholding in the company to Mrs V Radia and her family in Kenya.

Thereafter, before I got married in Tanzania, I was a Tanzanian Citizen throughout the period. I also sold the remaining shares to Parties in Kenya and Tanzania. …

Recently, you have now transferred all the properties into Glen International Limited, and I am no longer required to be a bare trustee. This was done to protect my privacy and also for me getting other complications because I have no interest in the Company since disposing of my shares in 1994. …".

490. I find that this letter was written by Subhash and that he forged Ramila's signature on the letter and then sent it to Bowling & Co. The intention was to provide instructions to Bowling & Co which appeared to come from Ramila directly. Specifically, Bowling & Co was to write to Mr Shelton to instruct him that she has disposed of her shares in Glen some years previously and to ensure that Glen's records were amended accordingly. I also find that Subhash acted in this way because he wanted to provide a spurious air of authenticity to Mr Shelton that Ramila had sold her shares in Glen previously. I further find that this letter was triggered by Subhash having decided, in the light of his fall out with Birkett Long and their direct contact with Vijaya in Kenya and the disclosures that had had to be made in various pieces of litigation about his involvement in the affairs of Glen, that there was a real risk of his fraudulent use of Ramila and Vijaya's names coming to light. Subhash had, in consequence, hatched his further fraudulent scheme to transfer all properties registered in Ramila and Vijaya's names into Glen's name and all shareholdings in Glen and Teso to be re-registered in Mr Harjivan's name, in both cases using the registered names as nominees. The beauty of this scheme, from Subhash's point of view, was that he had obtained Glen and Harjivan's permission to use their names whilst hiding from both Glen and Harjivan the fraudulent purpose of that use.
491. 6 December 2000. A document dated 6 December 2000 addressed to Mr Shelton at Glen's offices in Jersey and purportedly signed by Vijaya was disclosed by Subhash during trial no 2. The letter purported to come from Mrs Vijaya Radia, PO Box 78, Kisumu, Kenya and it stated:

"I have sold my 499 shares to a Mr Mahindra Harjivan of Mozambique PO Box 1127 Maputo, Mozambique.

Please arrange for these shares now to be registered in his name. I have received substantial shares consideration overseas as agreed between the Parties. It will remain confidential between us as contracted.

I have requested Ramila L Thakrar as my bare trustee to surrender one share to Mahindra Kumar Harjivan.

Yours sincerely

[Vijaya Radia]

492. 9 December 2000. A shorter letter dated 9 December 2000 purportedly signed by Ramila and addressed to Mr Shelton was also disclosed. This stated:

"As requested by Vijaya Radia, please transfer one share held in my name to Mahindra Kumar Harjivan of PO Box 1127, Maputo Mozambique.

As you know, I had sold all my interest and shares in Glen International Limited back in 1990 when I was non-resident and overseas.

Yours sincerely

[R Bhojani]

493. This was the first occasion shown in contemporary documents adduced in evidence that Harjivan's name had been linked to Glen or Teso.
494. Ramila stated that she never signed the two letters sent in her name and Vijaya stated that she never signed the letter sent in her name.
495. I accept this evidence from each of them. I find that the purported signatures on these letters were forgeries placed on the letters by or on the instructions of Subhash in furtherance of his fraudulent scheme to misuse Glen and Harjivan's names as a front to his fraudulent misappropriation of SPC's and William's Estate's property.
496. 1999 - 2000. According to Subhash's and Mr Harjivan's subsequent uncorroborated statements unsupported by any document or any other evidence that did not emanate from them, Mr Harjivan bought 499 of the 500 issued shares in Glen from Vijaya and the 2 issued shares in Teso.
497. I have already found, for the reasons given above, that Mr Harjivan did not buy any shares in either Glen or Teso, did not pay Ramila or Vijaya or any third party or cause any one else to pay Ramila or Vijaya or any third party anything that could be considered to be consideration passing from Mr Harjivan or to Ramila or Vijaya for such a sale and did not acquire a beneficial or any interest in Glen or Teso or in any asset, property, charge or other interest held by or on behalf of Glen or Teso.
498. June 2001. Enfranchisement proceedings were about to reach trial relating to a property at 92 East Dulwich Road, SE22 brought by the long lessees against Glen, the newly registered freehold owner and also Vijaya, in whose name the property had previously been registered. Furthermore, Birkett Long was seeking to charge this property with the judgment that that firm had obtained against Vijaya for their long outstanding fees.
499. 22 June 2001. Mr Harjivan and his son Mitesh each provided Subhash with a general power of attorney in accordance with section 10 of the Powers of Attorney Act 1971. Each gave as his address: "Maputo, Moçambique - postal code no 1127". This was the first occasion that this address appeared in any document.
500. I find that Subhash obtained these powers of attorney initially so as to be able to use both Mr Harjivan and Mitesh's names as part of his dishonest scheme to deprive the long lessees of their rights of enfranchisement and Birkett Long of its entitlement to charge this property with their fees judgment.
501. 29 June 2001. Bowling & Co were instructed by Subhash to convey Flat 2, 92 East Dulwich Road, SE22 to Mitesh Mahendra. This was undertaken in order to seek to defeat the enfranchisement proceedings and Birkett Long's charge. On being informed of this transfer, Birkett Long immediately wrote to Bowling & Co challenging the bona fide nature of this transaction and stating that the firm was minded to draw the circumstances of the transaction to the attention of the court. Birkett Long was ultimately paid off using funds supplied by Subhash which he obtained from Glen.
502. I find that these instructions were given by Subhash to further his fraudulent scheme in relation to this property.
503. 6 July 2001. At a CMC involving all parties, it was stated that SPC intended to advance a Part 20 claim against Glen and Ramila in relation to the property portfolio. All parties were ordered to serve their amended, and final versions of their claims. At that time, Subhash appears to have decided to arrange for Thakrar Family members to be separately represented.
504. I find that the reason why Subhash decided to arrange for the other family members to change solicitors and to be separately represented in the composite action was because he had become concerned that it would be discovered that Ramila and Vijaya were, in truth, himself by other names and that he had a close connection, or even beneficial ownership, of Glen. Moreover, he wanted to avoid the situation that had arisen not long before this CMC in which parties claiming against Glen were able to show that Glen and Subhash were closely connected. All other parties were not told of this decision and only learnt when SPC attempted to serve amended proceedings on Glen and Ramila by serving Subhash and the other family members' then solicitors, Bowling & Co who remained Subhash's solicitors after the change of representation for the other family members. All that was ever stated by Subhash's representation was that there was a conflict of interest arising from Subhash being sued and from his acting as Ramila and Vijaya's attorney on their behalf in the same litigation. This explanation was untrue, Subhash did not perceive any conflict of interest, merely a risk to his elaborate and dishonest charade vis-à-vis Ramila and Vijaya being discovered.
505. 29 August 2001. Bowling & Co informed Drukker & Co that they were not instructed by Ramila or Glen when Drukker & Co attempted to serve them with SPC's amended Part 20 claim which joined them into that claim against Subhash.
506. October 2001. A witness statement was prepared on Subhash's instructions by Bowling & Co in the name of Mitesh Mahendra to be signed by him. This states:

"I am Mitesh Mahendra of Maputo Mozambique, caixa postal 1127 and I am the owner of Flat 2, 92 East Dulwich Road, London, SE22.

I can confirm that I purchased the aforementioned property from a Mrs Radia in June 2001. I was first made aware of this property by a Mr Subhash Thakrar who has been my accountant in the UK for about 2 years. He knew that I was looking for an investment property and he advised that another of his clients had this property for sale.

I agreed to purchase the property for £59,995. I paid this sum personally to Mrs Radia in Mozambique in cash in June 2001. I should explain to the court that this is not at all unusual in Mozambique. people do not use banks and cheques as they do in the UK – very large transactions are commonly carried out in cash.

I do not visit the UK regularly and I therefore granted Mr Thakrar a power of attorney in order that he could deal with the formalities of the purchase of the property on my behalf. He instructed solicitors to act for me on the purchase.

… I understand that it is alleged that Mrs Radia sold this property to me so as to prevent the claimants from being able to enforce a judgment against her assets. I have no previous knowledge of these proceedings or indeed of any other of Mrs Radia's other business dealings. I have never met her before and I have no relationship with her apart from the fact that we appear to share an accountant. I knew nothing of her reasons for selling and I did not ask her about this.

507. Mr Mitesh Mahendra signed this statement and it was returned to Bowling & Co.
508. Mr Harjivan admitted in evidence that the statements in this witness statement were untrue and that his son had merely signed the statement and returned it because Subhash had asked him to do this.
509. I find that the witness statement had been forwarded to Birkett Long by Bowling on Subhash's instructions in a successful but dishonest attempt, with the dishonest assistance of both Harjivan and his son, to persuade Birkett Long not to press its charging order application against 92 Dulwich Park Road SE22.
510. 26 November 2001. Subhash drafted and sent a forgery, namely a letter purportedly written by Ramila, to Mr Simon Clark of Kotecha & Co instructing him to act for her in the SPC Part 20 claim. The letter was drafted on 26 November 2001 but was backdated so as to be dated 12 November 2001. Ramila's address was given as PO Box 42, Tabora, Tanzania. Subhash resorted to this manoeuvre so as to be able to implement his decision to instruct other solicitors to act for the other family members that he had taken in July 2001
511. 29 November 2001. Ramila and Glen were joined as part 20 defendants to SPC's part 20 claim against Subhash and Neil's executrices. The substance of the principal claim against both Ramila and Glen was that neither was a purchaser for value of the SPC portfolio allegedly transferred from SPC to Ramila and subsequently transferred on from Ramila to Glen. Declarations were sought against both that they held these properties on constructive trust for the benefit of SPC and orders that each should transfer the SPC properties free of any interest of either to SPC.
512. December 2001. Quastels appointed to act for Glen in the Part 20 proceedings. Bowling & Co continue to act for Subhash. Nicholas Drukker & Co were acting for Party 2.
513. 15 February 2002. Mr Clark telephoned Mr Wheeler of Drukker and asked whether he would be interested in a "drop hands" settlement on behalf of Ramila. This offer was stated to have been made following a meeting of Subhash, Glen and Ramila's solicitors.
514. I find that Subhash was the driving force behind the offer being made and that the meeting of solicitors was at his instigation and the offer that emerged from that meeting was the one he instigated and, in effect, instructed should be put forward.
515. 5 March 2002. Nicholas Drukker & Co, who were acting for Party 2 in trial no. 1, were faxed by Kotecha & Co asking for an extension of time for Ramila to serve her defence because of both sickness and bereavement. Mr Clark had been informed by Subhash that those reasons had delayed the instructions needed to enable the defence to be finalised.
516. 6 March 2002. Mr Clark informed Subhash that he would have to give proper addresses for both Ramila and Vijaya.
517. 16 March 2002. Mr Clark sent a letter by hand to 8 Ickelton Road, Mottingham since he wanted to contact her direct to get her to sign the draft pleading and about the security for costs application. The draft pleading was enclosed with the letter. This was a Saturday and the letter was sent by courier. The letter was asking her to contact him. Subhash had informed Mr Clark that Ramila was temporarily in England recuperating from illness. Ramila stated that she never received this letter and Mr Clark does not appear to have chased her up.
518. I find that Mr Clark's letter was never received by Ramila. In all probability, it was delivered by courier to Subhash's offices and he deliberately failed to deliver it to Ramila and, instead forged Ramila's signature on the defence document.
519. March 2002. An unsigned defence was served on behalf of Ramila. The allegations and denials were based on instructions received from Subhash. Kotecha stated in a covering letter that they were having some difficulty in contacting Ramila.
520. 20 March 2002. Mr Clark, in relation to a security for costs application against Ramila and Vijaya, served a witness statement that reiterated Subhash's instructions that Ramila was normally resident in Tanzania and Vijaya in Kenya.
521. 4 April 2002. Nicholas Drukker replied to the drop hands offer with a counter-offer of £300,000 to settle all actions with the defending Parties deciding amongst themselves from which Parties and in what amounts that sum should be provided.
522. Kotecha replied to Nicholas Drukker rejecting the SPC counter-offer. The letter expressed astonishment that proceedings alleging fraud against Ramila should have been instituted and allegations of fraud made in a case where SPC demonstrably had little or no real evidence to back up the allegations. Kotecha stated that the prospects of SPC succeeding with the claim against Ramila were remote.
523. 17 April 2002. Mr Spalter of Quastels offered a settlement of £50,000 and Mr Wheeler of Nicholas Drukker counter-offered with a figure of £150,000 at a without prejudice meeting of all Parties. These offers were made on the basis of an overall settlement involving Party 2, Subhash, Glen and Ramila.
524. 24 April 2002. Amended particulars of claim were served in the Family Actions on behalf of Ramila, signed RL Thakrar, and on behalf of Vijaya signed by Subhash as her attorney. Ramila disputes that the signature on that pleading was hers.
525. I find that someone forged Ramila's signature on the pleading which had been sent to Subhash at SKT for signature by Ramila and returned to Bowling & Co and that Subhash knew that he had no authority from Vijaya to sign a pleading on her behalf.
526. 10 June 2002. Mr Spalter of Quastels telephoned Mr Wheeler of Nicholas Drukker and stated that the offer of £50,000 had been made on behalf of Glen only.
527. June 2002. Mr Spalter of Quastels offered Mr Wheeler of Nicholas Drukker a sum of £50,000 to be paid by Glen and Ramila to settle SPC's claims against both. On instructions, Mr Wheeler accepted that offer and SPC's Part 20 claim against Ramila and Glen was dismissed by order made on 16 October 2002^[223].
528. 29 January 2003. Subhash was dissatisfied with the advice and performance of Quastels in relation to that firm's conduct of Glen's defence to SPC's Part 20 claim. He instructed Bates & Co to consider making a negligence claim against Quastels and Bates & Co asked Mr Shelton for his views about Quastels' handling of the case. Mr Shelton stated in an email sent to Bates that emerged on discovery:

"I confirm that I was of the opinion that settling for £50,000 plus our costs was an excellent result for Glen, as we had no defence to the corporation tax claim, apart from the fraud allegations which were potentially disastrous for us.

I also confirm that Counsel's advice that there was little likelihood of a successful application for costs [by Glen against Suburban] seemed correct to me.

Further an unsuccessful application may have persuaded the Plaintiffs of the strengths of their case. We were fortunate that the Plaintiffs' solicitors did not seem to realise how strong their case really was. All in all it was an excellent result for Glen."

529. Mr Shelton was asked why he thought that the fraud allegations were potentially disastrous for Glen and he replied:

"Fraud allegations of course could well be – were potentially disastrous for us. If a finding of fraud is made, then of course, there could have been a tracing claim against Glen, but I was also worried within that fraud allegation about the breach of fiduciary duty, although I was not quite so sure about that."^[224]

530. I find that Mr Shelton's freely expressed view in what he would have considered was a privileged email contained a devastating expression of his real view as to the merits of the fraud action against Glen. He clearly thought that that SPC's fraud action against Glen was both a strong one and one that had real prospects of success. This finding as to Mr Shelton's view about the fraud claims is reinforced by the evasive answer he gave when asked to elaborate on his view that the fraud claim was a good one. It is clear from the totality of his evidence that Mr Shelton's view was based on his concern at Subhash's paramount involvement in all Glen's affairs including the action against Glen. He obviously thought that Glen, Ramila and Subhash were, in reality, one Party and that if that was established by Suburban, its claims based on fraud would be made good.

11 Trial No. 1 an abuse of process?

11.1 Introduction

531. This section of the judgment is concerned with the extent to which trial no. 1 was conducted as an abuse of process. This question raises these issues:

(1) The role of Subhash in the Thakrar actions.

(2) The source of funding for the pursuit of the Family Actions.

(3) The role of Parties 5 and 6 in the Family Actions.

(4) The role of Parties 8 – 13 in the Family Actions.

(5) The role of Glen, Teso and Mr Harjivan in collaborating with, aiding or supporting Subhash and the Thakrar family in the Family Actions.

(6) Whether, in the light of the answers and facts found in relation to issues (1) – (5) above, the Thakrar Family Actions were conducted as an abuse of process.

532. These issues arise for five reasons. Firstly, Party 4 faces an appeal brought by Parties 8 - 13 against two of my findings in trial no. 1 relating to the claims brought by those Parties against Party 4 (limited to the claims against Miss Harris as Neil's executrix) and contends that that appeal should be brought on the basis that it is an appeal from a judgment that is brought by the losing Parties who, as is now known, had conducted their case at trial in a dishonest and abusive manner. Secondly, Party 4 wishes to enforce the costs orders in its favour against Party 1, as Party 7's Trustee in Bankruptcy, and Parties 7 - 13. Thirdly, if the Family Actions were conducted as an abuse of process, because Ramila and Vijaya were put forward as bringing valid claims in circumstances in which they were not Parties at all and had no valid claims and their claims were pursued in their names by Subhash, the judgments and orders (including for costs) against them should, as they claim, be set aside. Fourthly, if the actions were conducted as an abuse of process that would provide additional grounds for SPC's claim that the compromise it entered into with Glen in trial no. 1 should be set aside as having been induced by fraud and fraudulent misrepresentation. Fifthly, if the actions were conducted as an abuse of process by Subhash, it would provide an additional ground for his being precluded from maintaining a contribution claim against Party 2 in their on-going claims against Glen and Teso and in their enforcement proceedings being brought against Subhash's Estate and against Party 4.

The role of Subhash in the Thakrar actions

533. The nine Family Actions began as a result of instructions given by Subhash to Birkett Long in 1998, more than 3 years after Neil had died on 17 January 1995 and without any prior written complaint or letter before action. The common allegation was that in about 1983 Neil offered to sell 13 freehold properties in Gurdon Road and Fairthorn Road to Subhash for £5,000 each on the basis that each freehold would be transferred to a member of Subhash's family.
534. In order to make up the requisite number of Gurdon/Fairthorn properties for the purpose of the litigation, Subhash included 2 properties transferred to Ramila's name which were never intended to be part of this 'job lot' of 13 properties; this 'error' was corrected in 2000 with a re-amended points of claim in one of the actions in Ramila's name in which a contemporaneous but separate agreement between Neil and Subhash was then alleged.
535. Of the 9 actions, 2 were brought in Ramila's name, 2 in Vijaya's name, and one each by or in the names of Mukesh, Vijay and Kishan, Sheela, Naina, and Shantaben. Three firms of solicitors were involved in these actions. Initially Birkett Long was instructed and Mr Adrian Livesley assisted by Mr Oliver Pryke acted. Mr Pryke gave evidence. When Subhash fell out with that firm, instructions were transferred to Bowling & Co and Mr Jeremy Kleinfeld, who also gave evidence, was the file holder assisted by Mr Simon Clark. A perceived conflict arose between the case being conducted for Subhash in his defence to the main action and those being conducted on behalf of Parties 8 – 13 and instructions for the Thakrar Family Parties were then transferred to Kotecha & Co to Mr Simon Clark who had moved to that firm from Bowling & Co. He also gave evidence. The three solicitors who gave evidence had initially given witness statements for Parties 8 – 13 but those Parties indicated that they were not calling them to give evidence. In consequence, the court directed that they attend to be questioned on their witness statements as officers of the court rather than as witnesses for particular Parties. In addition, on 2 August 2006, the court received a further witness statement from Mr Livesley^[225] in response to written questions raised by Party 4 in consequence of which Mr Livesley was not directed to attend court to be questioned.
536. One unsatisfactory feature of the written evidence of the solicitor witnesses who were required to attend to be questioned was the way in which Seddons, the solicitors then acting for Parties 8-13, went about obtaining and preparing the statements in 2005. It appears they were prepared by reconstructing the facts based on an incomplete selection of documents supplied to each witness by Seddons. Mr Pryke's oral evidence, expressing dissatisfaction with the process, was very clear as to how unsatisfactory that process was. However, the oral evidence of each was clear and the result was to provide the court with a clear account of how the Family Actions were progressed. That evidence was also important as the catalyst for the production of the more than twenty boxes of documents which came to light as a result of Mr Pryke's evidence. These boxes had been in Mukesh's custody or control at 113 Woolwich High Street since 2005 but had not been disclosed despite the numerous disclosure requests and orders made in these proceedings. It is clear to me that this non-disclosure was the result of Subhash having taken steps to arrange for these boxes to be transferred to SKT's offices and then having instructed Mukesh to keep them from disclosure. It is not clear how these boxes evaded the search and seizure process undertaken in 2005, probably they were only transferred to SKT's offices after that process had been executed.
537. Until, at the earliest, late 2001 Subhash openly gave all relevant instructions for all 9 actions. Simon Clark gave evidence that as from then or early 2002, when a conflict emerged between Ramila and Subhash, he looked to Mukesh and Vijay for instructions. However the documents, such as the instructions as to what experts to instruct that were given to Kotecha in June 2002 and the testimony of Mukesh, Vijay, Sheela and Naina all pointed to Subhash as the directing and guiding hand in the conduct of the Family Actions and that his guidance was followed by his siblings.
538. In reality, therefore, the evidence demonstrated conclusively that Subhash continued, and indeed continues until the last day of trial no. 2, to be the orchestrator, controller and director of those proceedings. His instructions and authority were never challenged but were always accepted as 'guidance' to be followed, even if dishonesty was required by one or more of his siblings in providing that compliance.

11.3 The source of funding for the pursuit of the Thakrar Family Actions

539. Contrary to the evidence given by the Thakrar family at all times to this court and in 2005 to the Court of Appeal, Subhash using Glen funds has funded Subhash's and the Thakrar family's proceedings throughout. Examples of such funding include a payment of almost £5,000 to Bowling & Co in June 2000 and a payment of £32,499 to Kotecha & Co in February 2003.
540. Notwithstanding his written evidence to the effect that the Thakrar family had funded the Family Actions, Vijay had to admit in oral evidence that Subhash in fact funded the Family Actions.^[226] Neither he nor Mukesh could explain where their supposed £100,000 borrowing from Teso had come from or whether, and if so how, it formed part of their supposed borrowings from Teso. Vijay and the other Thakrar family members were offered the opportunity to produce any documentation that might support the evidence that they funded at least part of the costs shown on the schedule purporting to show their respective contributions to costs of the Family actions totalling £282,442.^[227] No such material has been produced.
541. It is clear, therefore, and I find, that the Family Actions were funded throughout by Subhash using Glen funds and that the Thakrar family knew at all times that Subhash was funding their actions notwithstanding their evidence to the contrary. This funding relates to the costs and disbursements that had to be provided to the solicitors acting for the Thakrar Family members as well as those needed to fund Ramila and Vijaya's representation and those needed to fund Subhash's action claiming fees and his defence to the action brought against him by SPC.

11.4 The role of Ramila and Vijaya in the Thakrar Family Actions

542. Subhash has always asserted, and continues to assert in the unsolicited e-mails which he has bombarded the court with in recent months, that Ramila and Vijaya were fully aware of the proceedings being brought in their names and had consented from the start in them being carried on under Subhash's direction pursuant to the powers of attorney that he had obtained from them for the more limited purposes connected with the Jayaben trust. It is clear, and my findings made in earlier sections of this judgment support this conclusion, that neither Ramila nor Vijaya had the remotest inkling that proceedings had been started in their name or that they were Parties to an action in which monies were being claimed in their name. It is also the case, as I have now found that they had no interest in the subject matter of the actions being brought in their names and that the basis of the actions was misconceived in that the actions were based on the assertion that they were the beneficial owners of the properties in question whereas, as Subhash and the other siblings knew, the properties were beneficially owned by Subhash and had been obtained by him as a result of their dishonest misappropriation from SPC and William's Estate.
543. On amendment of the claims in 2002, and in conformity with CPR requirements, Mukesh, Naina, Sheela, and Vijay and Kishan signed Statements of Truth certifying that the facts set out in their respective pleadings were true. Each must have been aware that the basis of the respective actions, namely that they were beneficial owners of the property in question, was untrue and that they were lending their name to an action being brought to enforce Subhash's perceived entitlement to damages from Neil's Estate. Shantaben's pleading and the pleadings in Vijaya's name were certified by Subhash as attorney.
544. Ramila challenges the signatures on the pleadings in her name. The evidence is overwhelming that Ramila did not sign this pleading and I find that someone forged her signature on this pleading so as to make it appear as an authentic Statement of Truth signed by the claimant in whose name the action was being brought.
545. In signing the Statements of Truth as they did, the Thakrar family 'signed up' to the job lot agreement and represented to Party 4 and to the court that they were aware of the facts underlying their pleaded case and that those facts were true. From that point onwards, at the latest, they committed themselves to the lie about being individual purchasers of these properties together with each other and Vijaya. They were also locked in to corroborating Subhash's story that their co-claimant Ramila was in 1987 and remained at all times thereafter a wealthy overseas businesswoman, which was always how Subhash described Ramila so as to explain away her absence and her apparent ability to fund large property acquisitions in England despite her overseas resident status. The Thakrar family sought to explain Ramila's lack of involvement in the later stages of the proceedings notwithstanding her living in Mottingham and having some contact with some of the siblings by alleging that she had disappeared from the Thakrar family following a family falling-out. This disappearance never occurred but, even if it had, it would not begin to address the fundamental problem for the Thakrar family that they lent their names and their verifying signatures to actions founded on a lie which they knew was being put forward by Subhash.
546. In July 2001 all Family Actions were transferred to the TCC. As from 2002 these actions were case managed under Subhash's fees action as the Lead Action and disclosure, evidence and findings in one stood as disclosure, evidence and findings in all.
547. In November 2001, and as a result of the joinder of Ramila to the Part 20 claim, 'Ramila' sent a letter drafted on Subhash's computer to Mr Simon Clark at Kotecha instructing him to represent her and, to be consistent with the basis upon which 'she' had purchased the SPC portfolio, gave her address as PO Box 42 Tabora Tanzania. This letter was a forgery in the sense that it was not written by her, not signed by her but it told a lie about itself in that it was representing to Mr Clark that she was personally instructing him to act for her.
548. In January 2002, Kotecha replaced Bowling & Co on the record for all claimants in the Family Actions. On 20 March 2002, Mr Clark made a witness statement in opposition to Party 4's application for Ramila and Vijaya to give security for costs in which he stated that Subhash gave instructions for Ramila and Vijaya under a power of attorney and that they lived respectively in Tanzania and Kenya. This was untrue in relation to Ramila since her home was by then 8 Ickleton Road. Indeed, it had been her place of residence for almost 7 years by that time. Subhash both knew and believed that Ramila was living at 8 Ickleton Road in 2002 as can be seen from drafts of his own correspondence that were found on his hard-drive.
549. By August 2002, 'Vijaya' had been 'relocated' to PO Box 1127 Maputo, Mozambique. This followed, and is at least in part a reaction to, the service of a statutory demand at Vijaya's address in Kenya following a judgment for outstanding fees obtained against 'her' by Birkett Long. PO Box 1127, by then a former address of Mr Harjivan, was already in service as the address for Mr Harjivan family's power of attorney.^[228] As a defunct PO Box, it then became a convenient location for unwanted correspondence to Vijaya, a matter about which Subhash apparently reminded Mr Harjivan between his giving evidence on day 8 and on day 22 because Mr Harjivan's original evidence had destroyed the pretence that this PO Box had been made available for Vijaya.^[229] This PO Box in Mozambique provided Vijaya and, thereby, Subhash with a new but crucially remote and inaccessible overseas identity.
550. Subhash attempted to maintain the lies as to the genuineness of this PO Box as Vijaya's litigation address which she had consciously adopted during the course of the proceedings. I asked him whether Vijaya's denial of any knowledge of this address or of her knowledge that it was being used although she was still living and resident in Kenya was part of the body of perjured evidence that he had recently maintained Vijaya had given. He insisted that Vijaya was lying in denying knowledge of the use of this PO Box. He stated:

"A. Your Honour, there is a story behind that and the truth of the matter is simple. Birkett Long, Aiden Lively (sic) was a partner who wrote to her in Kenya. I forget the name of the solicitor who directed somebody from Nairobi to go and see her at her shop. Oh crumbs, I've forgotten, He is the guy who did the power of attorney for Vijay. I can't remember his name. Anyway, you know, what happened is she rang me up she says, "Do you want me to commit suicide with all these things happening? What's going on here? Why is this guy writing to me here when I told him not to write to me?" I said "I don't know, I'll have to enquire about it." She said "You'd better do something otherwise Lalit is going to kill me or I have to commit suicide." Lalit is her husband. So I then immediately contacted Aiden Lively and sent him a letter which in fact caused me a problem with my institute because I called Aiden and said very simply "Why did you write to Vijaya in Kenya when she was not to be written because of the problems it created?

Then it was agreed between her and Harjivan and myself that, yes, she could use the Mozambique address to deflect future correspondence and that's a fact, that she had agreed that.

JUDGE THORNTON: Who made the suggestion that she should adopt a Post Office address in Mozambique?

A. I think that was a discussion between three of us: Vijaya, Harjivan and myself.

Q. Where did this discussion take place?

A. On the telephone to her, when she rang me telling me – she was so upset about these letters from Birkett Long, etc.

Q. Did you suggest to her that she'd adopt this address?

A. I may have.

Q. Okay. Did she raise it with you as a possibility?

A. She was more than happy, so long as she did not get problems in Kenya. …

Q. So Vijaya is lying when she says there was no trouble that she was aware of?

A. I'm prepared to put my life at stake on that point. That's how strongly can say to you. She was fully aware of that."^[230]

551. This evidence is dishonest, untrue and a recent embellishment on earlier lies relating to Vijaya's alleged difficulties in receiving communications in Kenya. Indeed, this evidence has the hallmark of recent invention that was resorted to in desperation and in the knowledge that it would be too late for Vijaya to rebut it or for it to be demonstrated to be untrue. I reject this explanation in its entirety.
552. It is not necessary to go through each step of the proceedings and examine each dishonest act of Subhash along the way. Suffice it to say that he found the maintenance of the deception that Ramila and Vijaya were live Parties to the litigation harder and harder to maintain. On one occasion, he had to orchestrate a telephone conversation with Vijaya. On another occasion, someone purporting to be Ramila telephoned "her" solicitor and, since he did not know her, was able to deceive him into thinking it was her who was telephoning when it clearly was not her but someone masquerading as Ramila. He also had to carry off the story that Ramila had disappeared following a family quarrel. Some letters were sent to Ramila and Vijaya but were delivered to SKT's offices at Subhash's instructions for him to "forward" them to the relevant cousin. Clearly, these letters never re-emerged from SKT's offices. The disclosed documents are full of letters written by Subhash to the various professionals concerned with the litigation on behalf of the Thakrar interests which refer to instructions he has received from his client, being either Ramila or Vijaya as the case might be, and which are written on the basis of his having direct and regular contact with these clients. Ultimately, the deception could not continue because direct contact between solicitor and either Ramila or Vijaya became necessary. The consequence was that the action brought by each of them was dismissed due to lack of instructions and non-compliance with court orders.
553. 5 The role of Parties 8 - 13 in the Family Actions
554. 5.1 Introduction
555. Over the course of the original proceedings, the Thakrar family members were, to varying degrees, drawn into continued perpetration of the lies about (a) the respective whereabouts of Ramila and Vijaya and (b) the funding of the Family Actions. Ramila's and Vijaya's four actions were finally struck out in August 2003. Before that occurred, the Thakrar family's lawyers were throughout deceived about the genuineness of Ramila's and Vijaya's participation in the litigation and as to the bona fide nature of the Thakrar siblings' and cousins' cases. The foreign residence of both cousins was maintained as a fiction. Thus, in resisting a security for costs application against Ramila, her solicitor did not take the first and irresistible point that she was resident within the jurisdiction, no doubt because he had not been informed of this obvious fact by any one of his Thakrar clients, all of whom he was representing. It is clear that the Thakrar family did not have any compunction about their own legal representatives, however innocently, misleading Party 4 and the court. Had the Thakrar family not joined in with Subhash in this deceit, both Ramila and Vijaya would have surfaced, the truth would have been discovered and the Family Actions would have failed on the grounds that they constituted a systematic and fraudulent abuse of the court's process.
556. I will examine the role of each sibling in turn.

11.5.2 Vijay

557. Introduction. In 1995 Vijay, working for SKT, had undertaken the work necessary to arrange a mortgage with the Abbey National to assist Babu and Ramila in the purchase of 8 Ickleton as their home. Vijay and his wife attended Shimeer's wedding in August 2001 and knew Ramila was still living at 8 Ickleton. This led to his being in difficulties in giving evidence about his knowledge as to where Ramila was living at the critical period during the litigation.
558. Vijay's role in the deception relating to Ramila and Vijaya. In July 2002, Mr Clark wrote to Vijay enclosing a letter for Ramila and asking Vijay to forward it. In cross-examination, Vijay was clearly uncomfortable about this letter and I find that he did nothing about it because he was aware that Ramila was not a genuine Party in the Thakrar Family Actions.^[231]
559. In October 2002, Mr Clark sent a draft of Ramila's statement, giving her address as in Tanzania, to Vijay by e-mail on the basis that Vijay would obtain Ramila's signature and referred in the e-mail to their discussion about the statement and likewise in relation to Vijaya in February 2003. Vijay's evidence was that he had no recollection of those e-mails or of attending to them personally. He did recollect that he and Mukesh took over the role of giving instructions on behalf of Shantaben and the other siblings in the other Family Actions from 2002. These instructions were based on discussions the two of them had with Kishan, Sheela and Naina from 2002.^[232] It is clear that Vijay received these e-mails but decided to ignore them because he did not want to reveal that Ramila and Vijaya were not genuine Parties to the Thakrar Family Actions.
560. Vijay's evidence in relation to giving instructions on behalf of Ramila and Vijaya was that he honestly did not even ask himself who was giving instructions on behalf of Ramila and Vijaya. However, Mr Clark confirmed that letters written in February 2003 concerning and giving instructions relating to Ramila's and Vijaya's cases were signed by Vijay and Mukesh or by Vijay alone. Mr Clark must have continued to communicate with Vijay about Ramila and Vijaya because Mr Clark was not told that Vijay was unable to reach her and was unaware of where she was. I find that Vijay did sign these letters and that he purported to give instructions on Ramila and Vijaya's behalf knowing that they were not genuine Parties to the Thakrar Family Actions. ^[233]
561. On 15 January 2003, Mr Clark spoke to Vijay about arrangements for Ramila and Vijaya attending the trial and Vijay informed him that he did not expected that they would attend. Mr Clark also received a conference phone call from Vijay, Mukesh and Subhash on 24 February 2003 in which he recorded that Vijay said that he had spoken to Vijaya, who in turn had said that she had spoken to Ramila and that neither would travel to England to give evidence or travel to give video link evidence. This information about Ramila and Vijaya was all recorded in a contemporaneous witness statement of Mr Clark prepared to support an application for Ramila and Vijaya's evidence to be adduced under the Civil Evidence Act 1995 without their giving oral testimony. On 20 March 2003 such a ruling was made in principle, subject to conditions for authentication which the Thakrar family's lawyers proposed. I find that Vijay did make the statement to Mr Clark that Mr Clark's contemporaneous attendance note records him as making and that Vijay made that statement knowing it to be a lie.
562. The court was greatly influenced in deciding at the directions hearing concerned with the admission of Civil Evidence Act notices that the proffered statements of Ramila and Vijaya were genuine by the evidence that Ramila was in Tanzania and Vijaya in Mozambique. This evidence was heavily reliant upon the information provided by Vijay and Mukesh in their conversation with Mr Clark. Vijay's evidence was that Vijaya had been called by telephone and, after a greeting, simply said to Vijay "we are not coming". Vijay was unable to explain how the Thakrar family's legal team had told the court in the lead up to and throughout the trial that Ramila was living in Tanzania and Vijaya in Mozambique.^[234]
563. In relation to the so-called family fall out in 2002 as a result of which, so the Thakrar family maintained, they believed that Ramila had gone away, Vijay believed the source of that information to be either Subhash, Mukesh, Kishan or Kiran at the office. He was unable to give any sensible reason for not telling Mr Clark in July or October 2002 or even later that Ramila's whereabouts were unknown and that she could not be contacted.^[235]
564. In relation to Vijaya's whereabouts, Vijay said that he thought she lived in Kenya and he did not say anything to Mr Clark about her not living in Mozambique because Mr Clark never asked. In order to escape from the earlier story told to Mr Clark about telephoning to Vijaya, Vijay had to change the story to Vijaya telephoning in – out of the blue – to say she and Ramila were not coming. This bare-faced lie falls apart when set against Vijaya's unhesitating evidence that she has never spoken to Vijay or Mukesh over the telephone. All Vijay could do, when challenged with this, was to say that as far as he could recall he did have a conversation.^[236]
565. Vijay's part in the misleading funding statement. In relation to the funding evidence given during the 2003 trial, it was important to the Thakrar family that they maintained the line that they personally were responsible for funding their and their overseas cousins' actions. This was done, in part, by each of Parties 8 - 13 confirming the total and breakdown details of funding in a schedule prepared by Vijay and Mukesh. This schedule was exhibited to both Vijay's and Mukesh's statements as well as to those of Naina, Kishan, Sheela and Shantaben. Mukesh's statement was to the effect that he and Vijay had been unable to get Ramila and Vijaya to contribute and that that necessarily meant that unless Mukesh was lying in his statement, Vijay had been lying about a matter he realised was important. Faced with that dilemma in cross-examination, Vijay froze and was unable to explain himself or give a proper answer.^[237]
566. Finally, and again in relation to the funding evidence, Vijay was unable to produce any evidence to demonstrate that he personally had made any contribution to the costs of bringing the Family Actions.
567. Overall, on each day that he gave evidence, Vijay was caught out telling lies which he appeared to make up on the spur of the moment. These lies occurred because he was unable to avoid revealing his knowledge and involvement in the deception being perpetrated by Subhash that was needed to maintain the charade that Ramila and Vijaya were knowing and willing claimants pursuing bona fide claims against Party 4 in the Family actions.^[238]
568. Against this background, I find that Vijay consciously and deliberately misled the Thakrar family's legal representatives, Party 4 and the court on these matters as and when they arose and did so for his own and for his family's advantage, to the detriment of Party 4. That active deception on the part of the Thakrar family, including that of Vijay, can be traced back to the time when instructions were given to Mr Clark in January 2002 to represent both Ramila and Vijaya, if not before. Mr Clark was instructed because it was no longer appropriate for Subhash and Ramila to instruct the same solicitor and Mr Clark had to look to Mukesh and Vijay for instructions in relation to the Family Actions. Behind the scenes, Subhash continued to instructed Mr Clark on behalf of the Thakrar family members and he remained the driving force behind the Family Actions. Such instructions as Mr Clark's clients gave him direct were those that Subhash had instructed his siblings to pass on.

11.5.3 Mukesh

569. Mukesh's credibility. Mukesh's denial of involvement in the Thakrar Family Actions and, in particular, in any deception arising from his cousins' misplaced involvement in those actions, raises a serious issue as to his credibility. His credibility is in issue for a number of reasons. Firstly, he was caught out over the HSBC account and the instructions that he said had come from Mr Harjivan to make payments from that account. However, his evidence was put in doubt when he then failed to produce the cheque book with the relevant counterfoils.^[239]
570. Secondly, Mukesh was and remains at the centre of operations at 113 Woolwich High Street. All the keys to Glen's properties were kept in a cupboard in his office until the interim Receivership was set up by the court Order of 2 August 2006. Furthermore, Mukesh had to compile the details of the leases and tenancies for the interim Receiver and he also stated that he was the only person who could prepare the details of the receipts into and the payments out of Glen's HSBC account.^[240]
571. Mukesh's involvement in these matters arose because he was the only one with sufficient knowledge to undertake these tasks and also because he insisted that he was the only one who should undertake them. It appeared that Mukesh had always been responsible for all matters concerning the management of the Glen properties and the HSBC account through which both rental income and property expenditure passed in the SKT era prior to Subhash's bankruptcy and he continued that role when SKTL was set up to take over SKT's business. It is also clear that although Subhash was no longer nominally involved in running SKTL's business, he continued to control Glen's affairs behind the scenes after his bankruptcy.
572. Thirdly, another important factor in weighing the likely credibility and attitude of Mukesh is his attitude to potentially relevant documents. In particular, his reaction and behaviour during the execution of the Trustee's first search warrant in 2005 suggests that he had much to hide in relation to the affairs of Glen and Teso. The warrant was executed by the Trustee's solicitor Mr Festenstein and he found files relating to Teso in a car in the car park in circumstances in which it was obvious that these files were about to be unlawfully removed from the premises so that they would not be obtained by those executing the search warrant. Mukesh was confronted in the car park and denied that he was attempting to remove files but was reluctant to identify the owner of the car in question. He also stated in evidence that he did not know whether there were Teso files or Glen files in the office. It was, however, clear that Mukesh was attempting to assist in the unlawful removal of Teso files and to minimise his involvement in, and knowledge of, Teso's affairs.^[241]
573. Subsequently, Mukesh purported to find relevant documents hidden away in a basement of SKTL's offices at 113 Woolwich High Street, London in December 2005 when these documents should have been disclosed much earlier in circumstances in which it was not credible that Mukesh was not aware of those documents. On a later occasion, Mukesh collected over twenty boxes of potentially relevant files from solicitors who had acted for Glen at a time when he would have been aware that the claiming Parties might be about to seek them from those solicitors and then took them to SKTL's offices without disclosing them. These documents only subsequently came to light. Finally, on a yet further occasion, Mukesh was responsible for the retention of some boxes of documents even when SKT had been directed to hand over to solicitors acting for Parties 1 and 2 all documents in SKT's possession.^[242]
574. Mukesh's involvement in the deception about Ramila and Vijaya. Mukesh was as culpable as Vijay in relation to the steps taken to mislead their own legal representatives, Party 4 and the court about the whereabouts of Ramila and Vijaya and in the deliberate inaccuracies contained in the funding statements produced during the 2003 trial.
575. In answer to the court's question as to how the Thakrar family's legal representatives came to tell the court in 2003 that Ramila was living in Tanzania and Vijaya in Mozambique, Mukesh's final answer was that instructions were given by Subhash.^[243] Even if true, it is inconceivable that the Thakrar family's legal representatives never discussed the whereabouts of Ramila and Vijaya with Mukesh in the lead up to the 2003 trial. For example, the Thakrar family's solicitor would have needed to discuss his urgent need to locate and speak to both Ramila and Vijaya in relation to that solicitor's application to allow their evidence to be admitted under the Civil Evidence Act in March 2003 and would also have needed to contact them urgently in connection with the four occasions when an application was made that they provide security for costs in March, July and August 2002 and March 2003.
576. When asked to explain his own role in the proceedings in his name, his answer was that the family left it to Subhash to guide them and Mukesh's explanation of the assistance he personally gave was that:

"I gave him [Subhash] my authority, and to assist, I wanted him to – well, he continued to help on the basis that I was kept informed"

577. In relation to the conversation in February 2003 with Mr Clark, Mukesh accepted he was present, said that he did not speak, could not remember whether Vijay did or did not speak, but did remember that Subhash had done most of the talking. He was also unable to assist in relation to Mr Clark's letter in March 2003 that stated that the information that Ramila and Vijaya would not be attending the trial had come from Vijay and Mukesh.^[244] He therefore knew that Mr Clark was being misled about Ramila and Vijaya.
578. Mukesh identified Subhash as the source of his information that Ramila had disappeared by going to Tanzania in 2002. Then shortly after telling the court that "nothing surprises [him] nowadays", he said that he would be surprised if Ramila had not gone to Tanzania. Mukesh knew that Ramila was married and had settled and bought a home in Mottingham in 1995 at 8 Ickleton Road. Thus, in truth he would have been surprised had Ramila suddenly disappeared.
579. Mukesh's involvement in the misleading funding statement. Mukesh's evidence about the November 2003 funding statement was very unsatisfactory. He stated that "Vijay and I were not able to get them [Ramila and Vijaya] to send money to us as they were very nervous about anyone in their home countries being made aware that they had money". He then stated that it was left to Subhash to take steps to contact Ramila and Vijaya. Then he stated in relation to his evidence that "the way it has been put in, it is slightly incorrect" and then, in answer to the court's question for an explanation said "I did not pay much attention to detail". Finally, when pressed further, Mukesh admitted that he had no first hand knowledge of any attempt to contact Ramila or Vijaya for funds.^[245]
580. The reality is that if Mukesh genuinely believed that Ramila was a willing Party to the Thakrar Family Actions, he would have contacted Babu or Ramila himself at 8 Ickleton Road and would have suggested that funds could be raised for Ramila by obtaining a mortgage loan from Teso. In fact, he turned a blind eye to the dilemma created by Ramila's supposed disappearance or non-availability to deal with her evidence or the need to provide funds for her representation and funding information for the court.
581. Conclusion – Mukesh. Against this background, I find that Mukesh consciously and deliberately misled the Thakrar family's legal representatives, the court and Party 4 in relation to the whereabouts and participation of Ramila and Vijaya in the Family Actions, about the funding of those actions and the other matters referred to above as and when these matters arose and did so for his own and for his family's advantage, to the detriment of Party 4, and to obstruct the just determination of the Family Actions. He did so knowing that Ramila and Vijaya did not have genuine and bona fide claims against Party 4 and that they were unaware of the actions or of their supposed ownership of the properties that were the subject-matter of the claims. Mukesh had this knowledge from at least January 2002.

11.5.4 Sheela

582. Introduction. Sheela's duties in the family include acting as a filter for her mother, Shantaben. On Sheela's own evidence, Shantaben has not been told of the judgment and costs order against her, of the freezing and disclosure orders against her, of the orders against her children, including Subhash, and would be shocked to find out. Sheela and Subhash were responsible for preparing Shantaben's evidence. Shantaben also did not know that she had borrowed £275K from Teso or that there was a charge over Sheela's home in which Shantaben lives or over the properties in Shantaben's name.^[246]
583. Funding and loan evidence. In Sheela's written evidence, which was in identical form to that of her siblings, she stated that she had obtained a loan from Teso to enable her to contribute to the funding pool and that Subhash had introduced them to Teso as an investment bank which, so Subhash explained, was far more likely than a high street bank to give loans without delays. This loan was supported by a charge she had given over her house. In relation to the loan and charge documentation, Sheela confirmed that the signatures were hers but could not remember why she had signed those documents. She also stated that Subhash had helped her prepare this statement.^[247]
584. In her oral evidence, Sheela said that she did not believe the evidence of the Teso director that the charge that she had given was invalid and told the court that she really did believe that she owed £285K to Teso because Mr Harjivan had telephoned Subhash about an investment opportunity in India and had lent the family £1.5million by paying it in India.^[248] This evidence obviously contradicted in a material way her earlier written evidence. Notwithstanding that there had been no previous mention of Mr Harjivan as a lender in any Thakrar family statements, Sheela denied that this was an invention made up with or as a result of coaching from Subhash.^[249]
585. Sheela was also asked about the source of the funding she contributed to the Family Actions since she had, in effect, withdrawn her written evidence that her contribution had come from a Teso loan. She stated that she knew that Ramila and Vijaya were also claimants in others of the Family Actions and, unlike Vijay and Mukesh, could remember a meeting at which the whole family, including Naina, had been present and agreed to put money in the pot as necessary to fund the proceedings. Sheela's contribution had included money from her salary.^[250] When challenged about this evidence by being asked for the source of her contribution to this pot, Sheela had no coherent story and could produce no documentary evidence to support her purported contribution of all or any part of the £49,042.26, being the sum she contended in her funding statement had been her share to the funding 'pot'. This ignorance arose despite her still having possession of the one Halifax savings account pass book from which she said contributions were taken.^[251]
586. In relation to servicing or funding the interest cost of the Teso loan to herself, an interest cost which exceeded her net salary, Sheela said that she "[did] not know what to say" before recovering herself and reverting to "I left all that for my brother to sort out for me so I do not know".^[252]
587. The only credible explanation for why Sheela changed her evidence so significantly in relation to the Teso loan and for her uncertainty about some of the material details of that loan and of the source of her contribution to the communal costs "pot" is that Subhash had both drafted her written evidence and had subsequently instructed her to state what she did in her oral evidence. I conclude that she was coached by Subhash as to what was to be said about the loan and about the source of her contribution to the funding pot. I also conclude that she did not contribute anything towards her legal costs and also knew that both versions of her evidence that sought to explain how she raised the money to make her contribution were untrue and were only being given by her in evidence because Subhash had coached her to give that evidence, initially in written form and later in a changed oral form. I also conclude that she knew that Ramila and Vijaya were not genuine or bona fide Parties to the litigation and that her attitude was that all decisions about the Family Actions and how they were conducted were to be taken by Subhash with no interference or argument from his siblings but with her active assistance when necessary.
588. Loan to Shantaben. When Sheela was pressed as to what had become of the £275K loan to Shantaben, Sheela's immediate reaction was to say that it was:

"… to pay for our legal … ."

589. She then checked herself, no doubt just remembering that she had just given evidence about everyone in the family contributing to the legal costs "pot". She then continued her evidence but was unable or unwilling to be specific about where Shantaben's £275K loan had come from or where it went to.^[253]
590. Sheela's preparedness to tell lies at Subhash's request. Sheela also gave evidence whose content demonstrated that she was prepared to tell lies about her involvement in the Thakrar Family Actions. For example, she stated that she did not accept that Subhash had been found to be a liar despite all the adverse findings made about him in judgment no. 1. Indeed, she considered Subhash to be trustworthy, subject to the qualification that no one is perfect.
591. There were two glaring examples of Sheela lying on Subhash's behalf. The first occurred in her statement where Sheela, having accurately referred to regular conversations and meetings between Ramila and Shantaben, then referred to a 'falling out' in 2002. No such falling out occurred. Secondly, Sheela could not say when Ramila lived at 8 Ickleton Road whereas she knew perfectly well that Ramila never left 8 Ickleton Road.^[254]
592. Sheela was also dishonest in a much more fundamental way. She rang Mr Clark out of the blue and masqueraded as Ramila and misled him into believing that there was a genuine client of his who was also a genuine claimant in the Thakrar Family Actions. I conclude that this telephone call, which Mr Clark confirmed he received on 5 July 2002, was made by Sheela for the following reasons:

(1) Sheela stated in evidence that Ramila had disappeared back to Tanzania because she had been deported. However, Sheela was not very clear about this alleged disappearance because she initially stated that Ramila had been refused entry into the UK. She later stated that Ramila had been deported and that she was clear that she meant 'deported' and not 'refused entry' which she said she remembered from conversation at a family meeting. Ramila has never been either deported from [or refused entry into]^[255] the United Kingdom.

(2) There emerged on discovery a briefing note written by Subhash headed "Notes for discussion with Simon Clark" and had written in the first person as if spoken by Ramila. This briefing note appears to have been written for someone to telephone Mr Clark and to discuss its contents with him and to do so by passing herself off as Ramila. This note states that Ramila had been deported.

(3) There was such a telephone call, according to Mr Clark which took place on 5 July 2002. Mr Clark thought that he had been called by, and was speaking for the first time to, Ramila. This caller he described as an Indian sounding lady. Ramila has given evidence that I accept that she never called Mr Clark and would not have known how to even if asked to do so since she knew nothing about him.

(4) Whoever made the call by impersonating Ramila did so with the intention of misleading Mr Clark into thinking that Ramila was his client and was alive and fully aware of the case she was bringing. The caller succeeded in reassuring Mr Clark of those facts.

(5) It is too much of a coincidence that Sheela used the same explanation about Ramila's disappearance as Subhash did in the briefing note.

593. Conclusion - Sheela. Sheela revealed herself as someone prepared to do whatever Subhash required of her, including telling lies and changing her story so as to assist in the charade that Ramila and Vijaya were genuine Parties pursuing genuine claims. She also joined in with her siblings in putting forward a false funding statement, thereby adding to the false impression given to her legal representatives, Party 4 and the court as to Ramila's and Vijaya's involvement in the Family Actions. Her own readiness to lie on any topic as coached by Subhash amply justifies a factual conclusion that Sheela told lies in relation to the proceedings tried in 2003 for her family's advantage, to the detriment of Party 4, and to obstruct the just determination of the Family Actions and that she deliberately masqueraded as Ramila on the telephone to convince Mr Clark that she was a real and genuine claimant in the Thakrar Family Actions.

11.5.5 Naina

594. Introduction. Naina said she knew nothing about Ramila's and Vijaya's actions and nothing about a family agreement to fund their actions, all she knew was that "Mukesh and Vijay were dealing with the family actions". ^[256]
595. Funding issues. In relation to her own supposed contribution of £9,000 towards the costs of the Family Actions and any rental income from 27 Gurdon Road, Naina's evidence was that she left all of that to Mukesh and Vijay, not Subhash.^[257] Naina also joined in the lie about borrowing from Teso and investing in India. She had left everything to Subhash but said that there had been a family meeting about investing in India.^[258]
596. Knowing assistance given to support the dishonest maintenance of the actions in Ramila and Vijaya's names. Naina appeared more removed from the family than any of her siblings, largely because she is married and is therefore less involved with her family than her brothers unmarried sister are. She stated that she did not know about the circumstances relating to the dishonest maintenance of the actions in Ramila and Vijaya's names since she left the day to day running of the Thakrar Family Actions to Mukesh and Vijay or to Subhash. I accept her evidence in that respect.
597. However, I do not accept that she had no knowledge of the fact that Subhash was promoting a group of actions in the name of Thakrar Family members including her own which involved using Ramila and Vijaya's names even though they knew nothing of these actions and did not have any personal entitlement to recover damages since they were not involved in the properties in question. I reach that finding as a result of the following facts:

(1) Naina made a statement in these proceedings, in similar form to her siblings. It included her evidence that Ramila:

"… was here and there. I had very infrequent contact with her. I never knew where she was." ^[259]

(2) The middle sentence of this statement, which I have underlined, was true. However, Naina also knew that Ramila had married and had settled in Mottingham. Naina had no reason to believe that Ramila had gone away to live abroad but she chose to give that impression in order to support the lie being told to support Subhash's, Mukesh's and Vijay's lies to the Thakrar family's legal representatives that Ramila had gone abroad.

(3) Naina had no idea how the court came to be informed that, as from 2002, that Ramila was living in Tanzania and Vijaya in Mozambique.

(4) She joined in with her siblings in putting forward a false funding statement, thereby added to the false impression given to her legal representatives, to Party 4 and to the court that Ramila and Vijaya were genuinely and knowingly involved in the Family Actions and that their respective whereabouts overseas were as stated by them.

598. Thus, on certain specific topics regarded by the Thakrar family as important to their position, Naina did not tell the truth. For example, her 'belief' in the Teso borrowing and charges and the Indian investment goes beyond the naïve and was indeed shown not to be genuine particularly since she stated that she did not discuss the Teso demand for £308K with her husband and he did not comment to her about it when she showed it to him. Equally, her evidence in relation to borrowing from Teso, the Teso charge and the Indian investment were not the result of error or ignorance, but were deliberate positive and dishonest statements also told for her own advantage without regard to the effect on the court or other Parties.
599. I conclude that Naina's conduct shows that she wilfully contributed to the deception practised on the Thakrar family legal representatives, on Party 4, and on the court and also contributed to the obstruction of the just determination of the Family Actions.

11.5.6 Kishan

600. Introduction. Kishan came to court with a script. He knew where Ramila lived and knew that Vijay had helped her to organise her mortgage. He had gone to Shimeer's wedding Party. He had delivered documents to Ramila at her home. Therefore, he would have known that Ramila's circumstances were and remain modest. He had sat at the dinner table with Ramila and Shantaben and would very probably have known what work Ramila did, when she was employed and that she was in low paid work at a local cash and carry. Nevertheless, Kishan had made a statement that he "thought of Ramila as a person who came and went all the time" and that he did not know that Ramila lived at her matrimonial home "full-time"^[260],
601. Kishan's lies. According to Kishan's evidence, Ramila would sometimes come over to Sheela's home, "Mum's house" to have her dinner and would then announce her departure without saying where she was going. Then, in 2002, he stated that Ramila said to Kishan that she was going away for a long time.^[261]
602. I find that Kishan was lying in stating this. I make this finding because:

(1) That statement is nowhere to be found in his written evidence and is materially at odds with what he did sign off.

(2) In his statement, Kishan only refers to seeing Ramila at "Mum's house very occasionally".

(3) There is no mention in his statement of an announcement by Ramila that she would be departing for a long time; rather he stated that there had been an evening when there were a lot of phone calls and then Ramila hadn't been seen since.

603. Kishan's oral evidence undermined the statements that he and his siblings had made in late 2005 that there had been a family fall-out in 2002. His more recent version provided in oral evidence was to the effect that Ramila had disappeared abroad and no-one knew where she had gone to. Kishan's purpose in giving this oral evidence was clearly to provide evidence to support the proposition that Ramila had not been seen for a long time. Kishan may well have forgotten the 'family fall-out' story and he probably simply made something up that would sound plausible. Kishan was clearly attempting to hold the family line and did so to the best of his ability.
604. Thus, overall, Kishan lied and misled and deceived his own legal representatives, Party 4 and the court for his family's advantage, to the detriment of Party 4, and to obstruct the just determination of the Family Actions.

11.5.7 Shantaben

11.5.7.1 Introduction

605. There is a doubt as to whether Party 13, Shantaben, was represented by anybody having authority so to do at any stage during trial no. 1 or since and as to whether she knew of the claims being brought against her and whether she had sufficient capacity to represent herself. Since both Subhash and Sheela, her eldest son and the daughter with whom she lives, hold powers of attorney, it is possible that she is a full party to the Thakrar Litigation despite her age and lack of knowledge due to the her being represented by either or both her children who hold her power of attorney. The following issues therefore arise:

(1) Did Shantaben have sufficient capacity to be considered as capable of being an independent party at all, or only at some and which, stages of the Thakrar Litigation?

(2) Did Shantaben have any, and if so, what knowledge of the actions being taken in her name in the initiation, funding and prosecution of the action in her name, in the result, in the appeal proceedings brought in her name and in the initiation and defending of the applications brought against her in the Thakrar Litigation and if so, what knowledge?

(3) Were any or all of the steps in the Thakrar Litigation taken by Subhash holding her power of attorney and, after 21 March 2006, by Sheela? If so, did Shantaben authorise those steps?

(4) Was Shantaben represented during trial no. 2 and, if so, by whom?

11.5.7.2 Factual Position

606. The relevant factual position is as follows:

(1) Shantaben is an elderly lady, said to be in her 80's and suffering from ailments which were reported to be asthma, osteoporosis, hearing problems and stress ^[262] affecting her ability to attend court in order to give evidence. She does not appear to speak English.

(2) Shantaben's proceedings were begun by writ issued on 7 September 1998. There is some at least documentary evidence^[263] that very shortly thereafter, on 17 September 1998, Shantaben executed a power of attorney appointing Subhash, her oldest son and then 'head' of that branch of the Thakrar family as her attorney pursuant to a general power of attorney. It is also clear that Shantaben executed a power of attorney on 21 March 2006 appointing Sheela, her daughter, as her attorney under a general power of attorney. Shantaben lives with Sheela in Sheela's house. Both powers remain valid and in force, Subhash's bankruptcy did not invalidate or avoid the power of attorney he holds from Shantaben.

(3) As to capacity, Shantaben is presumed to have been at all material times, and to be, competent to manage her property and affairs, including any litigation in her name. I attach no weight to the suggestions made by Mukesh in court during trial no. 2 that his mother might lack capacity. The suggestions were somewhat diffident, no medical evidence or evidence of her failing capacity was available and, moreover, Shantaben executed a power of attorney in favour of Sheela as recently as March 2006. When the deputy Official Solicitor met Sheela in her house on 6 October 2006, speaking through an interpreter with Sheela in attendance as well, she stated that she was unable to form an opinion as to whether she lacked capacity but she might well meet the Masterman^[264] criteria and have sufficient understanding.

(4) Throughout the first trial, and at all material times thereafter until Sheela gave evidence during the fact finding trial on 28 July 2006, the court and P4 had been led to believe that Shantaben was at least informed as to and knowingly approved of the proceedings taken in her name against P4, and also of various steps taken and transactions undertaken in her name.

(5) There is no reason to doubt that the legal representatives conducting the litigation in Shantaben's name were also led to believe that Shantaben was at least informed as to and knowingly approved of the proceedings and steps taken in her name against P4^[265].

(6) The steps referred to include (a) making witness statements as to the facts of her case and as to 'her' contribution to the funding of the Thakrar family actions, and (b) discussing with P7 and with P11 'her' case, the statements made in her name, and the information given on her behalf in 'her' proceedings.

(7) The transactions included (a) assigning the rents from 39 Gurdon Rd to Glen for a peppercorn, (b) purchasing 12A Spray St with the assistance of a mortgage, (c) borrowing £275,000 from Teso, (d) granting a legal charge over 39 Gurdon Rd and 12A Spray St to Teso, and (e) entering into a deed for the appointment of a Receiver, P19, over the rents and profits of 'her' properties.

(8) However, it is now said that Shantaben has very little, if any, knowledge of any of these matters. She is said to have relied and to rely upon Subhash and Sheela for information, which they filter very carefully. The conduct of the litigation in her name has been undertaken (a) by Subhash and, since 21 March 2006, Sheela under powers of attorney, and (b) by Mukesh and, until 21 March 2006, Sheela as parties generally giving instructions on behalf of the Thakrar family. Mukesh represented Shantaben when the Thakrar Family members were without legal representatives.

(9) There is no evidence that Shantaben had the means to borrow and to service the Teso 'loan' of £275,000 or any other sum, or even to pay £4,200 odd towards the costs of the Family actions. There is no evidence that there is any substance to the Teso charge relating to properties in Shantaben's name.

(10) Sheela said that Shantaben does not know of the judgment and costs orders against her, or of the freezing injunctions against her or that she has 'borrowed' £275,000.

(11) Any lack of knowledge of the freezing orders on the part of Shantaben is a matter of concern because specific provision was made by the court to enable these orders to be communicated to Shantaben in a way likely to minimise any shock. P4 was prohibited from effecting service directly. The orders of 29 October 2004 and 8 November 2004, made before Subhash's bankruptcy^[266], were to be served on Kotecha & Co for communication via Subhash. The order of 21 January 2005 provided for service via Kotecha & Co and expressly provided for Sheela to explain the terms of the order to Shantaben. In this context, I was concerned to, and, on the return hearing, the Thakrar parties were concerned to, protect Shantaben from personal service of the injunctions.

(12) Shantaben did not make any statement in relation to the so-called 'Family fall-out' between Ramila and the Thakrars on an unspecified^[267] date in 2002, notwithstanding that she was said by Sheela to have been "bombarded with phone calls at my home every 5 minutes".

607. I will also quote from the note made of her interview of Shantaben by the deputy Official Solicitor on 6 October 2006:

"Shantaben explained that she had not been well for three months and that she could not hear very well. … She said that she knew more or less about [the court case] going on in the High Court. She is not aware that she is a claimant in the proceedings. She is not aware of what the proceedings are about. She said she cannot remember a lot and she forgets things now that she is old. I asked her whether she had signed a statement for the case. She said she doesn't sign as she cannot read. She puts her thumb print. She was aware that she had put her print on some document. She was not aware of whether it was a short or a long document. It was not explained to her what it was. She could not remember anything and said she was very forgetful. They had asked her to put her thumb print on and she did. I asked her who asked her and she said it was her son, Subhash. Since her husband died, Subhash was the one who looked after her affairs. … Sheela interrupted and said that Subhash had had a power of attorney but that she now has power of attorney for her mother. … she said she had not [seen a solicitor] about the case and she said she had not but then added that her mind had gone. .. She knows that Subhash is bankrupt but does not know that there is an order against her. She has not heard of Glen International Limited or Teso International Group Limited. She does not understand and is illiterate. She was not aware that money had been borrowed in her name."

11.5.7.3 Shantaben – Findings

608. I conclude as follows:

(1) Shantaben has no current knowledge of, or involvement in, the Thakrar Litigation. She clearly has a failing memory, no understanding of her affairs, is both illiterate and a non-English speaker and is totally reliant on Sheela for all decisions that need to be taken about her life. She still looks to Subhash to look after all matters concerned with finance and investments.

(2) There was no explanation as to why a power of attorney was given to Sheela on 26 March 2006. The most likely explanation is that Subhash was bankrupt and appears to have wrongly thought that that avoided powers of attorney held by him. Moreover, the mediation had broken down, the trial was about to move to its [conclusion and the first steps to appoint administrators were being taken by Subhash and Mr Shelton]^[268].

(3) Although it would seem that Shantaben's memory and general frailty have weakened in recent years, her lack of knowledge of money, commerce and investments, her leaving everything to Subhash, her illiteracy and lack of any English and the traditional view she has adhered to that all matters of business are to be left, in her community, to the family head all suggest that she has never had any involvement in the Thakrar Litigation, the investments held in her name, her indebtedness and anything else concerned with the litigation.

(4) Shantaben knew she owned a flat in St John's Wood but that knowledge was clearly confined to knowing that her children referred to a particular flat as "yours". She did not seem to know how she acquired it or anything about the properties managed, owned or acquired by any of her children. This knowledge therefore does not indicate that she has ever had any involvement in her affairs or even that she has any idea of what any of the few documents Subhash has asked her to mark with her thumb are or contain.

609. I conclude that Shantaben did authorise Subhash to undertake whatever steps he felt were appropriate in relation to properties, money, investments and ownership. She was never consulted about any step in the Thakrar Litigation, but knew in the vaguest outline that the family were involved in a court case and was aware that Subhash was bankrupt but the significance of what that meant had clearly not been explained to her.
610. It follows that she authorised the action to be started in her name by virtue of her signing a power of attorney and all steps taken in her name. However, any document signed in her name would appear to be susceptible to an argument of non est factum or undue influence to the extent that any attempt is made to hold her liable under any document, including the power of attorney signed by her without any understanding of what the document was or of any liability for her that it might give rise to.
611. I also conclude that all steps were taken by Subhash exercising the power of attorney and that this power of attorney continues. However, since 26 March 2006, both Subhash and Sheela have been jointly acting on her behalf. Moreover, Mukesh represented her in court when representing all the Thakrar Family members. To the extent that it was stated that neither Subhash nor Sheela nor Mukesh were acting for her, as was contended in September 2006, a statement which led to my inviting the Official Solicitor to interview her, I find that these family members did not divest themselves of their authority to act. For example, Shantaben finally intimated her agreement to participate in the possible compromise in November 2006. This was done entirely by Sheela taking that decision, no doubt at Subhash's prompting, on her behalf. Equally, Sheela authorised the application to the Court of Appeal to be made in her name in November 2006. Thus, she was and remains being an active party to the Thakrar Litigation by virtue of her being represented under the powers of attorney held by Subhash and Sheela.

11.6 Conclusion – Abuse of Process

612. The Thakrar Family actions were conducted as an abuse of process. Subhash was the moving force behind this abuse but all Family members save for Shantaben were both willing and able participants and knew that the abuse was being carried out. The particular abuse was to carry out actions in Vijaya and Ramila's names knowing that neither had any knowledge of the actions being carried out in their respective names.

12 SPC's Compromise with Glen

12.1 Issues

613. SPC compromised or purportedly compromised its claims against Glen and Ramila for the recovery of the SPC property portfolio in June 2002. SPC has since become aware of many facts which it could not have known about nor could it with reasonable diligence have ascertained these facts. SPC now contends that these facts show that Glen, through Subhash, materially and fraudulently misrepresented many relevant facts which SPC relied on in deciding to compromise. These facts also show that SPC was defrauded into agreeing to compromise. Thus, SPC contends that Glen fraudulently induced the compromise and, but for that, it would not have compromised SPC's claims against Glen. It now seeks to set aside or have declared avoided the compromise and the consequent consent Tomlin Order of the court on the grounds of Glen and Subhash's fraud and dishonesty.
614. 2 The Factual Matrix to the Compromise
615. Following the service by Nicholas Drukker & Co of a draft of the proposed Part 20 claim to be served on Subhash and to be started against Ramila and Glen, in a letter dated 20 November 2001, Subhash drafted and sent what I have already found to be a forgery, namely a letter purportedly written by Ramila to Mr Simon Clark of Kotecha & Co instructing him to act for her in the SPC Part 20 claim. Her address was wrongly given as being PO Box 42, Tabora, Tanzania. Mr Clark accepted those instructions.
616. By an Order made by the TCC and dated 26 November 2001, Ramila and Glen were joined as Part 20 defendants to SPC's Part 20 claim against Subhash and the executrices of Neil. In June 2002, SPC agreed to compromise these claims against Ramila and Glen in return for a payment of £50,000. Pursuant to this compromise, SPC, Ramila and Glen executed or purported to execute a Compromise Agreement which is undated but which was executed on or before 16 October 2002 ("the Compromise Agreement"). By a Consent Order dated 16 October 2002 ("the Consent Order") SPC's claims against Ramila and Glen were dismissed. The effect of the compromise was that all claims brought by SPC against Glen were withdrawn in full and final settlement of those claims. SPC now contends in a fresh actions being tried as part of the Thakrar Litigation that that settlement, being both the Compromise Agreement and the Consent Order, should be set aside and/or declared to be void on the grounds that it was procured by Glen by fraud and by fraudulent misrepresentation.

12.3 Part 20 proceedings.

617. The Part 20 proceedings were, throughout, conducted as part of the overall Thakrar Litigation and from the outset had been directed to be prepared and heard as part of the other actions and claims being brought by and against Subhash. All orders and directions made by the court were to be applied and have effect in all actions and all were to be, and were, tried together. Throughout the period of their apparent involvement in the Part 20 claim, Ramila and Glen were represented by solicitors, namely by Mr Clark of Kotecha &Co apparently acting for Ramila and Mr Julian Spalter of Quastels apparently acting for Glen. Both Parties were also represented by counsel, namely Mr Robert Deacon instructed on behalf of Ramila and Mr Jonathan Ferris instructed on behalf of Glen. A separate legal team were instructed to represent Subhash, namely Mr Kleinfeld of Bowling &Co who instructed counsel, namely Mr Derek Sweeting QC and Mr Timothy Walker. Ramila and Glen purported to run separate defences which were based on each being separate from and independent of each other and Subhash and on their alleged separate and successive bona fide purchase of SPC's property portfolio.
618. The allegations made against Subhash, Ramila and Glen in relation to the ex-SPC properties were to the effect that neither Ramila nor Glen was a purchaser for value of the SPC portfolio allegedly transferred from SPC to Ramila and subsequently allegedly transferred on from Ramila to Glen. Both transactions were alleged to have been entered into dishonestly. Declarations were sought against both that they held, or had held, these properties on constructive trust for the benefit of SPC and orders were sought that each should transfer the SPC properties back to SPC free of any interest of either to SPC.
619. The proceedings were served on 13 December 2001. They were served on Glen in Jersey at Mr Shelton's offices and, by permission granted by the TCC on 27 November 2001, on Ramila at SKT's offices in Woolwich, London, the only address that Drukker & Co had for Ramila. Mr Shelton accepted service on Glen's behalf and Subhash accepted service, purportedly on Ramila's behalf.
620. In January 2002, Glen served a request for further information in respect of SPC's Part 20 claim. As is apparent from the nature of the information sought by this request, Glen was contesting SPC's case against Subhash that the purported sale of the SPC portfolio to Ramila had been procured by Subhash by fraud and/or in breach of fiduciary duty and either for no consideration or at a substantial undervalue. Further, as is also apparent from the request in respect of paragraph 35 of the Part 20 claim, Glen was also contesting SPC's allegations that Subhash had arranged both the formation of Glen and for the transfer of SPC's property portfolio to Glen. In paragraph 14 of its subsequent defence, Glen did not plead to these allegations but expressly made no admissions in respect of them.
621. At the first CMC held in the amended Part 20 proceedings that was attended by representatives of Glen and Ramila, both indicated that they would be instructed to apply for security for costs against SPC which was clearly unable to meet a costs liability if ordered against it. In response, it was intimated on behalf of Party 4, the defendant to the Thakrar Family Actions, that an application was being considered against Ramila as a claiming Party resident outside the jurisdiction and resident outside the EEC.
622. On 5 March 2002, Nicholas Drukker & Co was faxed by Kotecha & Co asking for an extension of time for Ramila to serve her defence because of a combination of both sickness and bereavement. Mr Clark had been informed by Subhash that those reasons had delayed the instructions needed to enable the defence to be finalised. The extension was, of course, consented to by Nicholas Drukker & Co without further question or enquiry.
623. On 6 March 2002, Mr Clark informed Subhash that he would have to give proper addresses for both Ramila and Vijaya. Mr Clark had the honest and reasonable belief that both Ramila and Vijaya were instructing him to pursue bona fide claims on their behalves, that both were permanently resident outside the jurisdiction, that both had instructed Subhash to act as their attorney in relation to these claims and that Subhash was therefore acting on their behalf and with their full, conscious and active authority.
624. Subhash never provided proper addresses, indeed he consciously and deliberately withheld informing Ramila that she had been served with a claim alleging fraud against her, did not ask her whether she wanted him to act as her attorney to defend the claim and to instruct solicitors to act for her, and never provided Ramila with regular, or any, reports of how the litigation was proceeding. These were significant omissions because Ramila was living in England and was easily capable of being contacted and spoken to since Subhash was fully aware of her address and telephone number and certainly Kishan met her from time to time at Sheela and Shantaben's house on occasions when Kishan's visits to his mother coincided with Ramila's visits to her aunt.^[269]
625. On 16 March 2002, Mr Clark sent a letter by hand to 8 Ickelton Road, Mottingham since he wanted to contact her direct to get her to sign the draft pleading and about the security for costs application. The draft pleading was enclosed with the letter. This was a Saturday and the letter was sent by courier. The letter was asking her to contact him. Subhash had informed Mr Clark that Ramila was temporarily in England recuperating from illness. Ramila stated that she never received this letter and Mr Clark does not appear to have chased her up. I have already found that Mr Clark's letter was never received by Ramila. In all probability, it was delivered by courier to Subhash's offices and he deliberately failed to deliver it to Ramila and, instead gave instructions to Mr Clark to serve Ramila's defence unsigned.
626. On 18 March 2002 Kotecha &Co served on Nicholas Drukker & Co a copy of what purported to be Ramila's defence that had been settled by Mr Deacon of counsel. Although the defence was unsigned, in the covering letter, Mr Clark explained that this document was only unsigned because Kotecha & Co were "currently having some difficulty in communicating with the client" but they "hope[d] to have the statement of truth signed shortly". In paragraph 2 of the defence it was expressly stated: "This Defence is on behalf of Mrs Ramila Suresh Bhojani the 4^th Part 20 Defendant". Although in the defence stated in paragraph 3 that Ramila had "limited knowledge of the detail surrounding many of the transactions", Ramila was nonetheless portrayed as having sufficient knowledge to "adopt as her own the case presented by [Subhash] in relation thereto."
627. Further, it is quite apparent from the defence, and in particular paragraphs 5, 9 and 12, that a positive case was being put forward on behalf of Ramila that:

(1) Ramila had entered into a bona fide agreement to purchase SPC's entire property portfolio from SPC, that that agreement had been made by Subhash on her behalf acting under a power of attorney, that Subhash had retained a solicitor to act for her in connection with this transaction and that that solicitor, Mr Roger Smith of Claremont Haynes, had acted on her behalf in relation to the purchase and had represented her throughout; and

(2) Ramila had, in turn, entered into a bona fide agreement to sell and transfer part of the SPC property portfolio to an independent third Party, namely Glen.

628. On the same date, Quastels served Glen's Defence on Nicholas Drukker & Co. This pleading had been settled by Mr Jonathan Ferris of counsel and it had been signed by a consultant at Quastels. It is again clear from the terms of this Defence, and in particular paragraphs 7-13, that Glen was also asserting, in similar terms to Ramila, that:

(1) Ramila had entered into a bona fide agreement to purchase the property portfolio from SPC at a fair market price; and

(2) Ramila had in turn had entered into a bona fide agreement to sell 77 properties from the SPC portfolio to Glen for £1,000,000, again at a fair market price.

629. On 20 March 2002, Mr Clark, in relation to a security for costs application against Ramila and Vijaya, served a witness statement that reiterated Subhash's instructions that Ramila was normally resident in Tanzania and Vijaya in Kenya. The application had been made in relation to their claims against Party 4 in the Thakrar Family Actions. Ultimately, security for costs was not required since I decided that no Party should give security against any other Party given the relative impecuniosity of all Parties, the serious allegations being made by all Parties against all other Parties that ought to be aired and determined in court and the need to avoid at least some of the claims being advanced being stifled due to lack of funds. However, very significantly, I directed that each Party should serve a funding statement on all other Parties stating what costs had been expended and how those costs had been funded. The purpose of these statements was to give all Parties full knowledge of the resources and sources of funding available to each Party and a clear idea of their potential liability in costs if ultimately directed to pay other Parties' costs.
630. It would have been obvious to every Party, including Subhash in his purported role as attorney for Ramila, that full, honest and transparent disclosure was required of where Ramila was living, what her representation was costing and how and from what source her costs were being met. None of this information was provided by Subhash to Ramila's solicitor or to the other Parties in the Thakrar Litigation.
631. On 24 April 2002 Kotecha & Co served by fax on Nicholas Drukker & Co a copy of Ramila's amended defence which was again settled by Mr Robert Deacon of counsel. The copy of the amended defence was again unsigned, but Mr Clark explained in the covering fax that the reason for its being unsigned was that "she [Ramila] has returned to Africa".
632. Mr Wheeler's evidence was that he:

"… do[es] not now recall ever having seen a version of this pleading signed by Ramila."^[270]

No such pleading was disclosed or obtained from Kotecha & Co when its relevant documents were disclosed by order. This absence of disclosure was significant. Although no formal order had been made requiring disclosure to be made by Kotecha & Co, I had ruled during the trial that disclosure without reliance on legal or litigation privilege should be given on the grounds that Kotecha & Co's documents were not subject to legal or litigation privilege in the unusual circumstances of the case. This finding had been made on the grounds that:

(1) Ramila had expressly waived such privilege as she had;

(2) the allegations of fraud that were being made were sufficiently cogent to have removed any privilege attaching to those documents; and

(3) this type of privilege could only protect or be claimed by the client and there did not appear to be a client who was able to claim such a privilege.

633. Mr Clark, on hearing of my ruling, was willing, as an Officer of the Court, to abide by it and he then examined all the files in his possession and disclosed any document from them, notwithstanding any privilege which could ordinarily be claimed which was relevant to the allegations being made in both the abuse of process proceedings and SPC's Part 20 claim. Thus, I find that Ramila never signed, or purported to sign, a copy of the amended defence served in her name.
634. Amended particulars of claim were also served in the Family Actions on behalf of both Ramila and Vijaya on 24 April 2002. Vijaya's pleading was signed by Subhash as her attorney. Ramila's pleading purported to have been signed by her but Ramila disputed that the signature on the pleading in her name was hers. In a word, she contended that the signature was a forgery. I have already found that someone forged Ramila's signature on this pleading which had been sent in draft by Mr Clark to Subhash at SK for signature by Ramila and had then been returned to Kotecha & Co apparently signed by Ramila. I have also found that Subhash knew that he had no authority from Vijaya to sign a pleading on her behalf.^[271]

12.4 Compromise negotiations

635. There were, ostensibly, four Parties involved in the compromise negotiations being SPC's solicitor, Mr Wheeler; Subhash's solicitor, Mr Kleinfeld; Glen's solicitor, Mr Spalter. Unknown to Mr Wheeler, Subhash was actively controlling the management of Glen and Ramila's defence as well as his own and was being permitted to do so by Mr Shelton of Glen and Mr Clark of Kotecha. In Mr Shelton's case, he was merely taking the same back seat as he had always taken in relation to Subhash's controlling influence over Glen's affairs. In Mr Clark's case, there was no dishonesty or deception rather, regrettably, a laxness and a willingness to take what he was told by Subhash about Ramila at face value. In other words, he accepted uncritically all the lies he was told about her absence in Africa, her leaving everything to Subhash and her unwillingness to introduce herself and to become involved even peripherally in the litigation. He also accepted uncritically Subhash's explanation of the source of her funding, namely that he as her attorney was using funds accruing to her from earned rental income from her United Kingdom-based properties.
636. The negotiations started on 15 February 2001 when Mr Clark telephoned Mr Wheeler of Drukker and asked whether he would be interested in a "drop hands" settlement on behalf of Ramila. This offer was made following a meeting of Subhash, Glen and Ramila's solicitors which had been convened to enable the co-defendants to discuss mutual co-operation in the litigation and a co-ordination of their respective client's cases. There would have been what can now be seen to have been an air of unreality within the Subhash camp amongst the three solicitors involved since it is clear that none of them was aware of the dishonest case being advance by Subhash or of the reality that the trinity of Subhash, Glen and Ramila were in truth one and the same person, namely Subhash.
637. I have already found that Subhash was the driving force behind the offer being made and that the meeting of solicitors was at his instigation and the offer that emerged from that meeting was the one he instigated and, in effect, instructed should be put forward. The three solicitors would have known that any settlement would have to be funded by Glen alone since they were informed that Ramila had no assets to pay towards any settlement figure and Subhash was neither able nor inclined to contribute. For this reason, it appears to have been decided that Mr Clark would speak for all three Parties. This may explain why the offer was made by Mr Clark since he represented the only Party who had no means of paying.
638. The first time that settlement was raised was on 15 February 2002 when Mr Wheeler received a call from Mr Clark who asked off the record about the EGM of SPC that had just been held to confirm the action of its directors in initiating proceedings against Subhash, Glen and Ramila. Mr Clark was informed that the EGM had resolved to continue the Part 20 claim and was looking for ways of funding that action. Mr Clark then asked whether a so-called drop hands settlement whereby SPC and the defending Parties would drop all claims and pay their own costs might be favourably considered by SPC. This was firmly offered as a settlement proposal to Mr Wheeler in a subsequent telephone call from Mr Clark who stated that the three solicitors for the defending Parties had met and had agreed, on instructions, which I find were the instructions of Subhash, to offer a drop hands settlement. Mr Kleinfeld telephoned Mr Wheeler later that day and repeated this offer.
639. On 4 April 2002, Mr Wheeler replied to the drop hands offer in a letter written to all three defendants' solicitors with a counter-offer of £300,000 to settle all actions with the defending Parties deciding amongst themselves from which Parties and in what amounts that sum should be provided.
640. Kotecha replied to Nicholas Drukker on 10 April 2002 rejecting the counter-offer. The letter expressed astonishment that proceedings alleging fraud against Ramila should have been instituted at all and that the prospects of succeeding against her were remote. The letter also expressed equal astonishment that allegations of fraud were being made in a case where SPC demonstrably had little or no real evidence to back up its allegations.
641. On 17 April 2002 a meeting was held between solicitors representing all Parties except Party 4 to discuss case management issues. Mr Spalter offered a settlement of £50,000 to Mr Wheeler who counter-offered with a figure of £150,000. I find that the initiative for this further offer came from Subhash, which explains why Glen's solicitor Mr Spalter took the lead in making it on behalf of all three defendants. I find that Subhash instructed Mr Spalter to make the offer because he wanted it to seem to SPC that Glen was acting separately from Subhash. Mr Wheeler, of course, did not know that Subhash was orchestrating the settlement negotiations or that Glen's directors were acting as ciphers without making any input into the negotiations themselves. It is also clear that Subhash informed the solicitors acting for all three defendants that the money to fund a settlement, if it was achieved, would be provided by Glen.
642. On instructions, Mr Wheeler wrote to all Parties with a "bottom line" figure of £120,000 on the basis that Subhash would withdraw his claim for fees and interest which stood on paper at a figure in excess of £1 million, arrived at by claiming compound interest at the rate of 2% per month compounded monthly. Clearly, although this counter-offer was sent to all three defendants, the principal recipient and the Party who would decide whether or not to accept it was Subhash.
643. No immediate response was forthcoming but, on 10 June 2002, Mr Spalter telephoned Mr Wheeler, again out of the blue, and stated that the offer of £50,000 that had been put forward at the meeting held on 17 April 2002 had been made on behalf only of Glen only. No explanation was made as to why this was so. After taking instructions, SPC decided to accept that offer. There was some jousting between Mr Wheeler and Mr Spalter in an attempt to, respectively, raise and reduce the settlement sum before an agreement in principle was reached on 14 June 2002 whereby Glen agreed to settle with SPC for a payment of £50,000. This agreement was subsequently embodied in both the Compromise Agreement and the Consent Order.
644. In the course of this concluding telephone conversation, but before the agreement in principle had been reached, Mr Spalter stated that Ramila had no money and was not worth powder and shot. He added that she was only added into the proceedings by SPC "because of the process". This, in context, was taken by Mr Wheeler to mean that Mr Spalter was stating the view that Ramila's only relevance to the action was that she had been in the chain whereby the SPC portfolio passed from SPC to Glen through Ramila's hands. Before reaching the agreement in principle, Mr Wheeler had a Land Registry search carried out which showed that all but a few properties in question were registered in Glen's name and those registered in Ramila's name appeared to be held by her as a bare trustee. Moreover, all the properties were subject to charges in favour of Teso. This confirmed in Mr Wheeler's mind that there was a weak claim against Ramila since she appeared to be nothing more than a link in the chain of conveyancing of the properties into Glen's hand or beneficial ownership and, moreover, these were now charged in favour of a yet further Party.
645. 5 SPC's reasons for compromising
646. SPC was led to believe by the conduct of Ramila's defence and Glen's defence to its claims that:

1. Ramila and Glen were active participants in the litigation;

2. Ramila and Glen were Parties independent of Subhash and each other; and

3. The defences being advanced by Ramila and by Glen were being advanced by them in good faith.

a. That belief was reinforced by the manner in which Subhash's defence was conducted following the joinder of Ramila and Glen as Part 20 Defendants. SPC's belief as to the status and basis of participating in the litigation was explained in the unchallenged evidence of Mr Wheeler who was not called to be cross-examined by Glen who elected to take a neutral stance in relation to this compromise issue. Mr Wheeler stated in his witness statement:

"At the time, in the absence of the facts now known to us as a consequence of the appearance of Ramila in these proceedings and the evidence uncovered by [Subhash's] Trustee in Bankruptcy, we had to take the assertions made in the Defences served on behalf of Ramila and Glen in good faith. We readily appreciated that this meant that we would have to prove (contrary to the assertions in both Defences) that Glen either did not pay Ramila for the [SPC] properties or took them with knowledge of [Subhash's] breach of fiduciary duty or fraud. These allegations, we knew, would be defended rigorously and would increase the scope of the subsequent trial immeasurably. Ramila and Glen gave every appearance, by the way in which their defences to our Clients' claims were conducted on their behalf, that Glen had an independent claim to the [SPC] properties that was not dependent upon or compromised by the conduct of [Subhash]. My firm had to conduct our Clients' case, and give advice to our clients in connection therewith, on the footing that Ramila and Glen were so representing themselves."^[272]

12.6 Respects in which SPC was misled into agreeing to compromise

12.6.1 Introduction

647. I have to consider whether SPC was misled in a dishonest and fraudulent manner about salient features of the case being advanced by or on behalf of Ramila by putting myself into the shoes of SPC at the time of the litigation and in the light of the knowledge it had, or ought reasonably to have had, at that time about the status of and the defence being advanced by both Ramila and Glen. The following are significant factors to be borne in mind in setting SPC's knowledge and belief into the factual context of 2001 – 2002:
648. Little was known about Glen. If any explanation had been sought or given, it would, in all probability, have been consistent with Subhash's sworn evidence in trial no. 1 that Glen had been set up set up to hold Ramila's property for inheritance tax purposes and that he believed that Ramila and her family had sold the company in 2000 to some people who Subhash did not know who were Portuguese nationals resident in Mozambique. Subhash, on this evidence, had had no involvement with Ramila's properties or the management of her investment properties for many years and knew nothing of the circumstances of the sale of Glen or of the identity of its new owners.]^...
649. Ramila was living abroad and did not visit England. She was a wealthy business woman and Subhash held her power of attorney in relation to her investments in England. These investments included the beneficial ownership of the properties which the two actions in her name in the Thakrar Family Actions were concerned with. Subhash's only connection with Ramila's defence was that he had acted as her attorney in relation to her business and investment interests in England and, once he had been joined with her in the same action, he could not continue to act in his own right and as Ramila's attorney in the same action. To that extent only, there was for Subhash a perceived conflict of interest.
650. There was no evidence of any dishonesty on the part of Ramila. She had been joined into the action as one through whose hands property had passed where that property had been sold to her in breach of trust and in circumstances where she had imputed knowledge of a breach of trust.
651. Ramila was an active and knowing independent party to the Thakrar Family Actions in her own right. She had started proceedings in her own name and had given instructions for Subhash, using a power of attorney, to give instructions and take all necessary steps to allow her to recover through the Family Actions brought in her name the monies still owed to her from the onward sale of long leasehold interests in those properties.
652. There was no evidence known to or reasonably knowable by SPC or its professional advisers that Subhash had any beneficial interest in Glen or its properties.
653. The action against Glen and Ramila was seen to be a difficult one since both Glen and Ramila appeared to be third party purchasers for value without notice of any relevant fraud or dishonesty on the part of Subhash. The only hope was to be able to show that there had been no consideration passing for each of the two sales, first to Ramila and then to Glen. The only other hope for SPC was of it being able to establish, without there being much evidence for this, that at the time that Ramila contracted to buy SPC's portfolio through her agent Subhash and Glen contracted to buy the same portfolio from Ramila, SPC would be able to show that each had constructive knowledge of Subhash's earlier independent fraud and dishonesty perpetrated on both Neil and on SPC.
654. Both Ramila and Glen appeared to have bona fide defences, albeit that these were not watertight or that SPC's claims were not hopeless.

12.6.2 False basis of SPC's claims against Ramila and Glen

12.6.2.1 Introduction

655. The basis on which SPC started proceedings against both Ramila and Glen and on which it subsequently agreed to compromise those proceedings was erroneous in all material respects. SPC contended that it was only first able to ascertain the relevant facts long after the compromise had been achieved, largely as a result of the emergence of both Ramila and Vijaya and their evidence but also as a result of the discovery of the enormous amount of relevant evidence extracted by the search and seizure process from Subhash's hard drive and from disclosure of documentation from solicitors acting for Ramila and Glen that was not disclosable in action no. 1. A final and significant factor was the emergence of Mr Harjivan and the extensive evidence he gave which showed how closely he, the "some Portuguese people in Mozambique", was to Subhash and how Glen had neither acquired beneficial ownership of SPC's property portfolio nor had disposed of it to Mr Harjivan or any other fourth party.

16.6.2.2 Ramila's relevant new evidence

656. The evidence given by Ramila regarding SPC's Part 20 claim was in summary that she:

(1) Knew nothing about the case or the claim until March 2005;

(2) Had not been informed by Subhash that such a claim had been brought against her;

(3) Had never heard of solicitors called Kotecha & Co;

(4) Did not instruct any solicitor, did not retain any solicitor, and did not pay any fees to any solicitor, regarding SPC's claim; and

(5) Did not request Subhash to instruct solicitors on her behalf to defend the claim.

657. Ramila's letter of instructions to Kotecha & Co was in fact a forgery drafted by Subhash and prepared on his computer hard disc and then signed with her purported signature. Further, although dated 12 November 2001, it was in fact created on 26 November 2001 and thus back-dated.^[273] The date of 26 November 2001 is consistent with the date of a letter written by Subhash to Mr Kleinfeld on the occasion of a CMC in the original action at which the Court gave permission to SPC to serve its Part 20 claim on Ramila at the offices of SKT, which is dated 27 November 2001. It is also consistent with Mr Clark's evidence in cross-examination that he was first instructed by Subhash on behalf of Ramila some time after 27 November 2001.^[274]
658. The letter purported to be written by Ramila gave as her address an address in Tanzania even though Ramila had, by the date of the letter, left Tanzania permanently and had been resident in England for over a decade. It enclosed "a photocopy of my Tanzania passport for your file" even though by that date Ramila's Tanzanian passport had expired since it expired over five years previously on 17 March 1996 and Ramila was in possession of a full current UK passport.
659. I find that the reason for the back-dating of the letter of instruction was that Subhash wanted to create the impression that Ramila had taken the initiative in instructing an independent firm of solicitors prior to her being joined as a Part 20 Defendant.
660. The clear inference from Mr Clark being given a false address and a copy of the first page of a foreign passport that had long since expired is that Subhash intended from the outset (a) to have the running of Ramila's defence to the Part 20 claim against her and (b) to exclude Ramila from knowledge of or participation in the Part 20 claim, the likely consequence of which would be to damage his own defence to the Part 20 claim, which was that Ramila was the true purchaser of SPC's property portfolio, and bona fide purchaser for value at that, while he had acted merely as Ramila's agent in effecting the purchase of the portfolio.
661. Subhash also prepared a further letter dated 12 November 2001 purporting to be written by Ramila, from the address in Tanzania, to him, apparently enclosing a copy of her letter to Mr Clark. On the same date, 26 November 2001, Subhash prepared a further letter on his computer hard drive actually dated 26 November 2001 and purporting to be written by Ramila to Mr Kleinfeld of Bowling & Co instructing him to transfer her files in the Family Actions to Mr Clark of Kotecha & Co. In that letter, Subhash referred to Ramila having written to Mr Clark:

"… on 12 November 2001 asking him to represent me at any Part 20 Claims against me from SPC."

662. Finally, Subhash also wrote a letter to Mr Kleinfeld dated 27 November 2001 which stated:

"On Ramila L Thakrar or Ramila Bhojani now- I think you should cease acting for her as there will be conflict and she will make different arrangements to appoint Simon Clark of Kotecha & Company. This was on the advice that you asked the Court to make the Order for me to receive papers to pass onto her for Defence. This is most improper, because I did not wish to be involved, because of conflict and this could cause other family rifts which is why I was most anxious for you to listen to me but you were adamant that, because I had a Power of Attorney, which is being revoked that I should still receive documents to pass on to her. She is not going to be happy when she has paid SPC in full, as clearly confirmed from information already in your hand.

This will also mean additional costs to her and the family, which they are not going to be happy with.

…

It is most important in the Family Actions for Simon Clark of Kotecha & Company to stand in instead of Bowling & Co., to represent Ramila Lalji Thakrar and Bhojani, because there is otherwise going to be a conflict of interest and difficulties arising. A letter has been sent to Ramila after our discussion on 12 November 2001 and that is what I am now pursuing with Ramila and Simon Clark."

663. Regarding these matters Ramila's evidence was that:

(1) She had never met, spoken to or corresponded with Mr Clark;^[275]

(2) She was "99 per cent" certain that the signatures on the letter of instructions to Kotecha & Co dated 12 November 2001 and the letter to Subhash of the same date were not hers;^[276] and

(3) So far as the letter of instructions dated 12 November 2001 was concerned:

"This letter may have been written by Subhash to Kotecha. The address is of Tanzania in 2001, when I was in London, ten minutes away from his house. And he says he has enclosed a copy of my Tanzanian passport and in 2001, since many years, I had a British passport. I did not have a Tanzanian passport. So he may have sent my passport for fraud activities to the solicitor." ^[277]

664. Ramila also stated in evidence that:

(1) Contrary to what Mr Clark had told Mr Wheeler in connection with obtaining the latter's consent to an extension of time for service of Ramila's defence, she had never arranged to meet with Mr Clark nor had she cancelled such a meeting owing to her own illness or a death in the family;^[278]

(2) She had never signed a defence filed on her behalf in the Part 20 claim;^[279] and

(3) Over the period February-June 2002:

(i) She had never been advised about a possible settlement of SPC's claim against her;

(ii) She had never been told or consulted about the terms of any such settlement;

(iii) She had never been shown the proposed terms of any such settlement or of any consent order; and

(iv) She had no personal knowledge of the signing of a compromise agreement or of the circumstances in which it came to be signed.^[280]

12.6.2.3 Mr Clark's relevant new evidence

665. Clark's evidence in cross-examination largely corroborated Ramila's evidence:

(1) Although he had been instructed to act for her on a matter while he was still at Bowling & Co, while so instructed he had never met her, had never corresponded with her directly, and had never spoken to her on the telephone.^[281] All instructions relating to the matter came from Subhash.^[282]

(2) During the time he was instructed to act for her in connection with her defence of SPC's Part 20 claim, apart from, possibly, the letter dated 12 November 2001, Ramila had never written to him directly, he had never met Ramila in person, he had never received a telephone call from her or spoken to her on the telephone until, he stated, he spoke to Ramila in July 2002, and although conscious of the need to establish a direct line of communication with her, he was unable to do so in fact.^[283]

(3) Information as to Ramila's whereabouts was given to him by Subhash.^[284]

(4) When he wrote to Ramila, he addressed the letter to the address in Tanzania that had been given on the letter of 12 November 2001 and also gave a copy of the letter to Subhash to forward to her in case, as Subhash told him from time to time, she was away from that address at the time.^[285]

(5) He participated in settlement negotiations without taking any instructions directly from Ramila but on the basis of instructions received from Subhash.^[286]

(6) He was unable to confirm that the person with whom he had a telephone conversation on 5 July 2002, a conversation recorded in Mr Clark's attendance note, was in fact Ramila and he accepted that anyone who had in her possession his letter to Ramila of 24 June 2002 addressed to Ramila in Tanzania and a copy of which had been given to Subhash, could have picked up on the points he was raising and addressed them in the telephone call to him.^[287]

(7) He did not have any contact with Ramila, whether in person or in correspondence or by telephone, between 5 July 2002 and the dismissal of SPC's Part 20 claim against Ramila and Glen in October 2002, nor did he send to Ramila for her comments or instructions any of the drafts of the compromise agreement that was being finalised between the Parties' solicitors over that period.^[288]

666. As soon as SPC indicated its intention to join Ramila and Glen to its Part 20 claim against Subhash, Subhash sought to distance himself from both Ramila and Glen. Thus:

(1) Subhash drafted a letter dated 30 October 2001 for Mr Shelton to send to Subhash in which, as drafted by Subhash, Mr Shelton had "sadly to inform you [Subhash], that your firm's services as Glen's accountants in the UK will no longer be required".

(2) At the same time Subhash drafted a letter dated 31 October 2001 for Mr Laffoley at Teso to send to him stating:

"Your appointment as Accountants/Consultants and Advisors

We wish your firm to keep accounting records for all our Company's lendings and transactions, as it relates to [Glen] and other clients of our Company."

667. Thus as the door of Glen's accountant was closing for Subhash, because Glen had been identified by SPC as the repository of the ex-SPC properties, the door as Teso's accountant was opening and, not only for Teso, but still also for Glen, since Teso was the holder of charges over Glen's assets which purported to secure the indebtedness of Glen to its own shareholder, who was in turn "another client" of SKT and Teso.
668. In a letter dated 27 November 2001 from Subhash to Mr Kleinfeld of Bowling & Co, being the solicitors then instructed by Subhash on his claim against Group 2 and on SPC's counterclaim against him, Subhash informed Mr Kleinfeld that the power of attorney he held for Ramila was in the process of "being revoked".
669. On 17 December 2001 Subhash wrote to Mr Clark at Kotecha & Co stating (emphasis added):

"[Ramila] sold her portfolio to [Glen] and thereafter, all her Shares in 1990 and has retained no beneficial interest in any of the properties or [Glen] since 1990. The properties were also transferred to [Glen's] name in the year 2000 and the family sold the shares to third Parties overseas in Mozambique. They have no interest whatsoever. I am no longer accountant to [Glen], as you also know."

670. As soon as SPC's claim against Glen was compromised, Subhash resurrected himself phoenix-like from the ashes as the accountant of Glen. Thus Subhash sent a letter to Mr Shelton, apparently dated 7 June 2002, in which he gave the following instructions:

"Further to our discussions last week, and again with the Shareholders, they have asked us to ask you to withdraw your letter of October 2001 about our appointment and the instructions that were previously given.

They are most happy with the services we have provided to the previous Shareholders of [Glen] and they wish to continue, because of our special knowledge and ability to assist and increase the value of their Company.

Therefore, would you please do a letter to us immediately withdrawing that and send a copy to Jeremy Kleinfeld with instructions that he should now deal with the matters we have instructed him upon."

671. However, although Subhash sought to distance himself on the surface from Ramila and Glen and the conduct of the defences of each of them to SPC's Part 20 claim, in reality, behind the scenes, he still pulled all the strings and gave all necessary instructions. This control of the litigation extended to agreeing a compromise of the Part 20 claim as against Ramila and Glen without the knowledge or participation of, or reference to, Mr Clark and Kotecha & Co, who were purportedly acting for Ramila, or Mr Kleinfeld and Bowling & Co, acting for Subhash himself.^[289]
672. The following exchange I had with Mr Clark is particularly telling:

"JUDGE THORNTON: Am I reading this correctly that you are being informed by Mr Thakrar that 'they' whoever 'they' might be had reached a settlement on SPC for Glen and Ramila which you were not aware of and which Mr Spalter regarded as a done deal and which did not include the case against Mr Thakrar, even though it was Mr Thakrar who appears to have been the leading originator in the settlement involving Glen and Ramila.

A. I do not know the extent to which Mr Thakrar was involved in any negotiations, but otherwise, yes, that does appear to be the case.

JUDGE THORNTON: He must have had some involvement, must he not, because he was able to ring you up and tell you that they had now reached a settlement?

A. Clearly he was aware of it when I was not.

…

JUDGE THORNTON: Well, looking at it, does it strike you as odd, with hindsight, that Mr Thakrar appears to be in the loop so far as the knowledge of the settlement achieved between SPC, Glen and Ramila is concerned, that his solicitor was not aware of the settlement but it was clear that it did not involve Mr Thakrar.

A. Yes. I probably assumed that he got the information because I think there was a close relationship with Glen, but I cannot recall the precise words that he said to me other than that are in this note."^[290]

673. Somewhat unexpectedly for a professional solicitor and an officer of the Court, Subhash's actions were supported by Mr Clark. Thus:

(1) From the very first time he heard about the case, in the course of a telephone call from Mr Kleinfeld of Bowling & Co, Mr Clark was aware that there was a conflict of interest between his client, Ramila, and Subhash.^[291] After Mr Clark had been taken to SPC's amended Part 20 claim, the following exchange took place:

"Q. … So, as I hope you will no doubt now recall, SPC was making some very serious allegations of fraud and misappropriation against Subhash which, in their amended part 20 claim, with which you were concerned, SPC were alleging gave rise to claims against Ramila.

I suggest to you that what constituted the potential conflict between Subhash and Ramila was that Ramila might wish to distance herself, indeed to disavow that she had any involvement in the wrongdoing which SPC alleged against Subhash.

Now, is that a fair summary of your understanding of the position at the time you had the conduct of the Part 20 defence?

A. Yes. Yes.

Q. And that was the sort of factor that operated on your mind when, as you say in your statement, contrary to previously where you were happy to act on behalf of Ramila simply on the basis that Subhash had a duly executed power of attorney, on this occasion you wanted to receive direct instructions from the client, in this case, Ramila?

A. Yes."

(2) Yet Mr Clark continued to accept instructions from Subhash throughout his conduct of Ramila's defence.^[292]

(3) Mr Clark was prepared to instruct counsel to settle both a Defence and an Amended Defence on behalf of Ramila in the Part 20 claim, notwithstanding that he had never been able to obtain instructions directly from Ramila or confirmation that what was pleaded on her behalf in those statements of case was accurate and the truth.^[293]

(4) Mr Clark was prepared to serve the Defence and the Amended Defence on Nicholas Drukker & Co for SPC as the genuine response of Ramila to SPC's claims against her and to SPC's allegations against Subhash and Glen, notwithstanding that he had never been able to obtain instructions directly from Ramila or confirmation that what was pleaded on her behalf in those statements of case was accurate and the truth.

(5) Mr Clark persisted in Ramila's defence of SPC's Part 20 claim against the dictates of proper practice and his own advice. Thus in a letter to Ramila dated 20 February 2002 Mr Clark advised in clear terms:

"… I am very sorry to say that it is absolutely essential that you meet with us if you wish for us to prepare a defence for you …

You have asked why it is not possible for [Subhash] to deal with the case on your behalf using the power of attorney that you have granted to him. Again, I am sorry to say that there is a potential conflict of interest between yourself and [Subhash] and it is simply not possible for him to give instructions here.

If you do not meet with us then we will not be able to continue acting and no defence will be filed by us. That will mean that, eventually, a judgment in default will be entered against you for, ultimately, in all likelihood, several million pounds …"

(6) But as Mr Clark admitted in cross-examination, Ramila did not meet with him and counsel, yet Mr Clark and Kotecha & Co continued on the record for Ramila and filed a defence in her name.^[294]

(7) In a letter to Ramila dated 27 February 2002, Mr Clark advised further in equally clear terms:

"I note that I have still not heard from you as to a date for a meeting with counsel.

…

I regret that, unless you are able to attend a meeting on Wednesday of next week, it would appear that we will not be able to take instructions from you in good time to prepare the defence. In that circumstance, there would be little point in my continuing to represent you and I will therefore apply to come off the record unless I have proper instructions from you by 6^th March. I will need for you to confirm that you can attend the conference by Friday 1^st March at the very latest otherwise I shall have to cancel and tell counsel to carry out no further work."

(8) However, once again, notwithstanding that Mr Clark did not receive confirmation from Ramila that she could attend a conference on or before 6 March 2002, or that he did not hear from her on or before 1 March 2002 to arrange such conference, Mr Clark and Kotecha & Co did not come off the record for Ramila and did not tell counsel to carry out no further work.^[295]

(9) On the contrary, Mr Clark wrote to Nicholas Drukker & Co requesting an extension of time to serve Ramila's defence, in a letter from Mr Clark to Nicholas Drukker & Co dated 5 March 2002, on the basis of instructions received, not from Ramila herself, but from Subhash.^[296]

(10) I conclude that Mr Clark was prepared to continue to run Ramila's defence on the instructions of Subhash so long as Subhash put him in funds.^[297]

(11) Counsel settled and Mr Clark filed and served a defence on behalf of Ramila not based upon her instructions or any input from her but upon instructions and documents received from Subhash.^[298]

(12) Mr Clark served the defence on Nicholas Drukker & Co notwithstanding that Ramila had not signed the statement of truth and notwithstanding that Mr Clark had received no indication from Ramila that she either approved the Defence or intended to sign it.^[299]

(13) Mr Clark served the defence on Nicholas Drukker & Co purely on the basis of instructions received from Subhash.^[300]

(14) Mr Clark accepted that in acting as he did he conveyed a false impression to Nicholas Drukker & Co, and hence to SPC as to Ramila's participation in the litigation:

"Q. You see, from the perspective of SPC and Nicholas Drukker & Co, your actions give all the impression of a client fully minded to defend the claim that had been brought against them by SPC and fully minded to continue to contest the proceedings, and yet, you had no knowledge, apart from the initial letter of 12th November 2001, what Ramila's position was, and indeed, on the contrary, from her continued stonewalling, notwithstanding your attempts and even Subhash's attempts, a strong impression that she did not wish to be involved in these proceedings at all. Did you not find that an unsatisfactory position in which to be, that did you not have instructions from your client but you were warranting to the other side that you had instructions to act in her defence?

A. Well, I am not sure that I was -- yes, of course it was an unsatisfactory situation. Of course it was one which caused concern. Yes, I totally accept that."^[301]

(15) Mr Clark had to accept in cross-examination that he had no instructions from Ramila to file a defence to SPC's Part 20 claim that expressly adopted the defence thereto that had been filed by Subhash, or even that she had seen and read such defence.^[302]

(16) Mr Clark participated in settlement negotiations without taking any instructions directly from Ramila but on the basis of instructions received from Subhash.^[303]

12.6.2.4 Mr Shelton's relevant new evidence

674. In general, Mr Shelton sought to oppose the proposition that Subhash had the conduct of Glen's defence to SPC's claim, but he was not prepared to waive Glen's legal privilege. Accordingly, I can only proceed on the basis of:

(1) the contemporaneous letters written by Subhash to Quastels, Mr Shelton, Mr Laffoley and others, drafts of which have been retrieved from the hard discs of the computers in the offices of SKTL; and

(2) Mr Shelton's response to the questions put to him in cross-examination, to the extent that he was prepared to answer them.

675. The latter appeared during this passage:

"Q. … I want to ask you now, Mr Shelton, about the claim that SPC Property Company made in these proceedings against your company, Glen International Limited. I am sure you are able to recall?

A. In the present proceedings? Or in previous proceedings?

Q. For the sake of argument, let us say the previous proceedings.

A. Okay.

Q. By that I think you mean the proceedings that culminated in a trial in 2003, in which Glen did not participate?

A. Yes.

Q. When did you first learn that SPC intended to bring proceedings against Glen to recover the properties that had been agreed to be transferred to Glen in March 1990?

A. I think some time in 2002 although I cannot be certain.

Q. The amended pleading, which included that claim against Glen, was served on Subhash in August of the previous year, 2001, and a CMC had been arranged to be heard in November of that year. And it appears, certainly no earlier than late October of 2001, Mr Thakrar took certain steps and it is those steps I would like to ask you about first. You find the relevant document at bundle E2. The relevant document is at page 308(1). You will see that this is the draft of a letter that Subhash intended that you should write to him concerning the reorganisation of the company affairs. Is this the document that you recall receiving?

A. I do not recall it. But I am not saying that it did not happen. But I do not happen to recall it.

Q. Do you or do you not recall sending a letter to Subhash in more or less these terms?

A. I do not recall sending the letter in those terms.

Q. Is it the case that in October of 2001, you took the decision to remove SKT as Glen's accountants?

A. I honestly cannot remember.

…

Q. Do you or do you not recall taking the decision to dispense with Subhash's services as Glen's accountant in October 2001?

A. I do not honestly remember, but I am not saying that we did not do it.

Q. Why would you have done it, if you did it?

A. Looking at this letter, if somebody no longer wished to remain as your accountant, then you would simply agree to it.

Q. If you turn over the page, 309, you see a draft that Subhash has prepared for Roger Laffoley to sign. It is dated the following day. And Subhash, as it were, resurfaces as the accountant, consultant and adviser to Teso. Do you recall that step being taken by Teso?

A. I do not recall it.

Q. It appears on the face of it, does it not, to be an attempt by Subhash to distance himself from Glen, while still performing the same role but as accountant for Teso?

A. It does, yes.

Q. Could you please be handed bundle E3?

A. I have that.

Q. This is a letter at page 379, a copy of a letter from Subhash to Simon, Simon Clark, of Kotecha & Co. Are you familiar with that gentleman or not?

A. I have spoken to Mr Clark and corresponded with him, yes.

Q. It is dated 17th December 2001 and it refers in the title to Ramila Thakrar. Again, I think you mentioned yesterday that you were aware who Ramila Thakrar was?

A. That is correct.

Q. And if you turn over to page 380, you will see in the second paragraph Subhash stating various facts that he thinks will be of interest to Mr Clark in defence of the claim that was being made against Ramila and in the final sentence you see the wording:

"I am no longer accountant to Glen International, as you will also know".

So, certainly he is telling the solicitor appointed to act on behalf of Ramila that he had ceased to be the accountant of Glen International; that is correct, is it not?

A. That is what this letter says, yes.

Q. And the two documents that I took you to a moment ago would seem to be consistent with that position?

A. That is correct.

Q. Then, four paragraphs down below that, it says:

"I trust therefore that you will please protest in the strongest terms to the court for having given permission for Ramila Thakrar to have been joined in this claim."

In the final paragraph:

"Similarly for Glen, again the same will apply when the papers are served. I have checked with Barry Shelton and the papers are now served incomplete. He will appoint another solicitor for the CMC so that there is no conflict, as agreed with you. I will let you know."

Firstly, that perhaps suggests that you were made aware of these proceedings a little earlier than you thought?

A. That is correct.

Q. But secondly, do we not see here another instance of Subhash on the one hand attempting to distance himself from Glen, while on the other hand, attempting to continue operations on behalf of all Parties, namely himself, Ramila and indeed Glen?

A. Sorry, I am not quite sure what answer you expect of me?

Q. Well, from your own perspective, does it not suggest that despite the fact that there is an apparent conflict between Subhash and Ramila and Glen, he is still very much involved in directing the litigation, so far as it concerns Glen?

A. You are wrong in that respect. I found the solicitors for Glen, that represented Glen in this litigation. And I dealt with them at all times.

Q. Sorry?

A. I dealt with Quastels.

Q. And are you suggesting that Subhash did not deal with Quastels?

A. I think he came to a meeting at Quastels to try to explain the position as he saw it in regard to the various claims that were being made. But certainly, he had no input into the final decision that was taken by Glen.

Q. Well, I am talking about the conduct of the litigation. I am asking you, is it your evidence that Subhash took no part in the conduct of Glen's litigation?

A. I cannot say he took no part because as I say, he came to a meeting but he took no part in the decision-making process in respect of Glen in that litigation.

Q. Can I ask you to turn on to page 446? There is another letter from Subhash to Mr Clark. You will see on page 450 that this letter is copied to you. So I take it that you will have received a copy of this letter?

A. Very likely, yes.

Q. It is headed, "Strictly private and confidential, not to be disclosed to any third Parties". It is addressed to Simon Clark at Kotecha & Co and it is headed, "Ramila L Thakrar/Glen International Limited: security of costs application."

So here we have Mr Subhash, himself a Party to these proceedings, apparently having a conflict of interest with Ramila and Glen, yet we see him writing a letter to Ramila's solicitor and dealing with the matter of Ramila and Glen.

Again, I would suggest that Subhash certainly regarded himself as having the right and the ability to conduct the litigation so far as it concerned all three Parties?

A. That might have been Subhash's opinion.

Q. Let me take you on to paragraph 20 of that letter on page 449. He says there:

"It is very clear that this is a very high drama, which has been created by the solicitors and courts, so that they can milk the cow, so to speak. This is a very costly affair now for myself, my family, R L Thakrar, my cousin, client for whom I am attorney, Glen International Limited, my other clients ... This is of concern to all and Barry Shelton has already instructed his solicitors to take care and not build up substantial costs. Similarly for Ramila... "

Again, it is fairly apparent, is it not, that in this letter, Subhash is regarding the separate claims that have been made against him, Ramila and Glen, in fact as one claim against him and he sees no reason why he should be having to foot the bill for three separate legal representations?

A. If that is your interpretation of it, Mr Cranfield.

Q. Was it your concern that Quastels should be encouraged not to take too active a role in these proceedings?

A. It is always a concern with any Party in litigation that monies are properly spent. That would be my concern, yes, of course.

Q. If you would turn over the page to paragraph 26:

"Regarding Mr Ferias and Glen's solicitors... "

Glen's solicitors were Quastels. Do you know who Mr Ferias is?

A. I have never heard of him.

Q. If it were spelled F-E-R-R-I-S, would that assist?

A. It certainly would not assist me.

Q. So you would be unaware that he was counsel instructed by Quastels to represent Glen in this litigation?

A. T hat is right, completely unaware.

Q. However, Subhash plainly was aware, was he not?

A. I do not know.

Q. He refers to him by name?

A. I assume that perhaps he had seen him at a CMC, I do not know.

Q. How does it come about that the company's accountant knows who counsel is, acting for the company, but the company's director does not?

A. Because if Quastels had asked counsel to represent Glen at a CMC, then I would not necessarily be interested in the name of the counsel. Mr Subhash presumably met him on that sort of occasion.

Q. And Subhash says this:

"Regarding Mr Ferias and Glen's solicitors, no doubt, this matter will be taken up by Glen but we certainly do not want to be embarrassed. There should be no challenge from Glen to [Ramila] or vice versa."

That appears, does it not, an instruction given by Subhash to Mr Clark acting for Ramila and copied to you, the director of Glen?

A. Yes.

Q. Why is the decision of whether or not to make a claim against Ramila a matter for Subhash rather than for you, as the director of Glen?

A. That is quite right, it is a matter for me.

Q. But it is quite plain here that Subhash is telling you what to do, is he not?

A. He was not telling me what to do at all. He is suggesting that there should be no challenge from Glen to Ramila. That is different from telling me what to do.

Q. Well, he is stating it rather as a peremptory fact:

"We certainly do not want to be embarrassed".

A. That is up to Subhash Thakrar. I do not write his letters for him. But I certainly do and I certainly did - and it is a proven fact in this particular litigation - act contrary to Subhash Thakrar's wishes.

Q. Well, again I am simply pointing out to you in response to your earlier answer, that you thought Subhash's involvement in this litigation was limited to him attending at a meeting of solicitors; it is actually far from reality, is it not?

A. I do not wish to be argumentative but so far as Glen was concerned, and myself, that was the limit of his involvement in this litigation. He might have thought that he had a role to play, but I can assure you that he certainly did not.

Q. Surely the letter we have just looked at is an example of that, of the role he perceived himself to be playing?

A. Writing letters or making self-serving statements or writing self-serving letters does not prove anything at all. I can assure you and I have proof of this and I think it was mentioned earlier, of letters that I have written to Subhash Thakrar -- one in particular I think about this litigation -- which prove that he did not have the input that he would like to have had in this litigation.

Q. Would you please move on to page 455? This is a letter written directly to you, 12th February 2002, heading:

"Re RL Thakrar, Glen International Limited, purchase of portfolio from SPC Property Company Limited."

So, again, he is writing to you in relation to all matters relating to the property portfolio, himself, Ramila Thakrar and Glen. Would you agree with that?

A. Yes.

Q. If you turn on to paragraph 9 on page 461, this:

"It is most important that you also do not capitulate and give the firmest instructions on behalf of Glen and the new shareholders and none of the properties can be given up. The monies have been paid. All the contracts are properly dealt with through the independent solicitors and there has been no undue influence of any kind whatsoever."

Again, an objective observer looking at that, who would you say was giving the instructions and who would you say was being sent the instructions?

A. Subhash Thakrar is attempting to give the instructions. It does not mean to say that his instructions were carried out and in fact the answer is, I did capitulate. I compromised that litigation, against Subhash Thakrar's express wishes, as you can see.

Q. And if you can perhaps now turn on to bundle E3, the same bundle, to page 553. This is a letter written to Mr Roger Laffoley at Glen, because you are away from the office. 7th May, 2002. Do you recall having seen this letter on your return to the office?

A. I cannot honestly say whether I have seen it or not.

Q. You will see in the third paragraph Subhash says:

"I understand Barry is away from the office until Tuesday, and as requested by you, I am writing this to safeguard you with Barry Shelton."

You will see in that paragraph, just before those words:

"... either Quastels do work in good spirit and with Kotecha & Co and Bowling & Co, otherwise Mr Harjivan will take steps to make changes and this is something, which has been made clear to Barry."

Is that right, had it been made clear to you?

A. Not so far as I know, no

Q. The following paragraph:

"Obviously, Mr Harjivan and his family are extremely unhappy about the way the costs of Quastels are building up and there seems to be no control over unnecessary discovery which is being given."

Over the page:

"I am prepared to assist in a limited fashion, but I will not succumb to threats. Equally, if Julian Spalter of Quastels does make any threats, then Mr Harjivan has promised that he will remove that firm forthwith. This is something you ought to know. I am also having to follow the client's instructions and unhappily, the shareholder's instructions have to be properly respected, otherwise these solicitors will waste substantial amount of hard-earned monies on their fees and costs … Also comparing their hourly fee rates, they cannot be allowed to continue unchecked or without any proper limits set. Our client is extremely upset that he and his family being taken advantage due to their present circumstances and [you] must take this into account as [you] are in a fiduciary position to protect their best interests at all times. False allegations from SPC should not intimidate any professionals into being blackmailed and part with monies and assets wrongly.

"We would also like to know what fees have already been paid to Quastels, what are the work in progress and what more is expected. This is important and then a review will have to be done as soon as possible. I await this information urgently so that I may pass it to Mr Harjivan for his further instructions. I wait to hear from Barry Shelton or you next week."

Is that not an example of Subhash attempting to impose very firm control on the conduct of Glen's litigation?

A. You are quite right. That is an example of Subhash attempting to exert control. In my opinion, the letter was a load of bluster, fairly typical of Subhash Thakrar and it was ignored.

Q. If you turn on to page 560, this is a letter Subhash wrote directly to Mr Spalter at Quastels but he copied you, as you will see on the following page.

A. Yes.

Q. I was directing to your attention that this was a letter, the second letter it appears of the same day, written to Mr Spalter of Messrs Quastels but copied to you, as you will see from page 2. So, again, this is an example of a direct communication by Subhash to the solicitors instructed by Glen, was it not?

A. Yes.

Q. I think earlier in your evidence you were unaware of such correspondence because you did not refer to it. Indeed, you thought Subhash's role was confined to attending a meeting with Glen's solicitors?

A. Yes.

Q. You see at 561, paragraph 7, the final sentence reads:

"We do not perceive to have any conflicts in dealing with the best interests of any of our clients that we have acted for and will act for, now or in the future."

And that is another example, is it not, of Subhash seeing himself, Ramila and Glen all as one?

A. I do not know. That is your interpretation of it. It is not the interpretation I would put on that.

Q. What interpretation would you put on it?

A. That Mr Thakrar is trying to claim that he has no conflict in dealing with Glen or Ramila, when he is also involved in this litigation personally. I happen not to believe that that was the case.

Q. So, did you take Subhash up on that?

A. No

Q. Did you not think it was unhelpful for Glen to have an accountant who appeared to believe he could behave in this fashion?

A. Certainly not. It is not helpful to Glen, no

Q. So why did you not take this matter up with Subhash?

A. Quastels were quite clear in their instructions and who they were receiving them from and who they were dealing with and they would have ignored that letter from Subhash.

Q. How on earth can you possibly say that?

A. Because I was in constant contact with Quastels and Julian Spalter.

Q. And you referred him to this letter?

A. I did not refer him to it, no.

Q. How do you know they ignored it?

A. Because they took no notice of Subhash in litigation and responded purely to my wishes.

Q. Turn over, please, to page 562, another letter from Subhash to Mr Spalter, of the same day. Perhaps that is the first letter, the second letter being the one we saw at page 560.

JUDGE THORNTON: Mr Cranfield, I am a little concerned that Mr Shelton may be waiving privilege without him appreciating it … Mr Shelton, you are at liberty as a director of Glen, to inform us of privileged communications that you have had with the solicitor. I assume for the moment that they are privileged. But if you do so, you are waiving the privilege and counsel will be entitled to call for the entirety of the written record of those communications, which previously might have been privileged.

A. Well, I certainly - I do not think -

JUDGE THORNTON: I am just informing you of that.

A. I certainly would not wish to waive privilege in respect of this litigation, because it is relevant to the present litigation.

…

JUDGE THORNTON: … I make it clear that all the documents that are being shown to you are documents that have been disclosed in the litigation and from what counsel tells me, certainly this document has been disclosed by Decherts. What I was referring to was communications, particularly telephone discussions, but also any letter that you may have written directly to Quastels, who are acting for Glen, and those have not been disclosed because they are - well, they have not been disclosed. And if you wish to give evidence about what you told Quastels, you are or may well be waiving privilege and the cross-examiner would then be entitled, if he wishes, to call for the complete record of communications because a Party cannot, in fairness, pick and choose which parts of a privileged communication is revealed in evidence. Either none of it is or all of it is. Now, perhaps you could continue with your questioning.

MR CRANFIELD: Well, Mr Shelton, I ought to ask you this. I can take you to a number of further documents, letters that Subhash produced and sent directly to Quastels. Is it the case that in asking the questions about those documents, you will find yourself in a position unable to answer because otherwise, you fear you would waive privilege?

A. I think without taking further advice, that would be my answer, yes.

MR CRANFIELD: My Lord, in light of that response, I am happy to conclude my cross-examination on this point now."^[304]

12.6.2.5 Subhash's Relevant New Evidence – His View as to Compromise

676. Subsequently I directed that Glen produce in court Quastel's file relating to SPC's Part 20 claim against Glen ("the Quastels file"), subject to Glen's right to claim privilege. Scott & Co, the solicitors on the record for Glen, duly traced the Quastels file through the hands of successive firms of solicitors employed by Glen as far as a firm called Jefferies. According to Jefferies, the Quastels file was one of the files collected from their offices in January 2006. Notwithstanding that, with the consent of SKTL, a further search was conducted of the offices of SKTL and further Glen files were found, but the Quastels file could not be found.
677. Subhash's view as to what he had achieved by compromising SPC's Part 20 claim against Glen and Ramila was clearly expressed in his letter to Mr Kleinfeld dated 14 June 2002:

"By them having now reached a settlement with Ramila and Glen for a sum of £50,000 in full and final settlement with all waivers, therefore, this does put their side in a great difficulty.

They have made a very substantial variation to their claim, and have let off the people who have the properties and benefit of any value in the properties that were previously owned by SPC."

12.6.2.6 Conclusion – New Evidence

678. This unguarded view of Subhash's is very revealing. He is virtually admitting that SPC had a good claim in fraud against Glen and that SPC had let Glen off a liability for fraud. If Glen was liable or even at considerable risk in fraud, in Subhash's mind, that could only be because he realised that his involvement in the asset-stripping of SPC was itself dishonest. Thus, Subhash was accepting that he and Glen were synonymous, something which he kept hidden from SPC who settled on the basis that Glen and Subhash were at arm's length and that it would be difficult to prove that Glen had been dishonest. In other words, Glen's defence was not being run in good faith.

12.7 SPC were misled

679. Had such course of events taken place, SPC would have learned the true facts, or at least Ramila's version of the facts, prior to October 2002. Had SPC known the true facts, it would not have agreed to the Compromise Agreement or the Consent Order.
680. Independently of the course of events that might otherwise have taken place, SPC in fact agreed to the compromise in reliance on the belief induced by Subhash (i) through Mr Clark, Kotecha & Co and Mr Deacon, by the conduct of Ramila's defence to its Part 20 claim; and (ii) through Glen, Quastels and Mr Ferris, by the conduct of Glen's defence to its Part 20 claim that:

(1) Ramila and Glen were active participants in the litigation;

(2) Ramila and Glen were Parties independent of Subhash; and

(3) The defences being run by Ramila and by Glen were being run by them in good faith;

12.8 Consequences of compromise

681. Given what actually happened in 2005 when Party4 sought to enforce the costs order it had obtained against Ramila in the original action, namely Ramila's intervention in the present proceedings to deny that the prosecution of the Family Actions in her name had been conducted with her knowledge or authority, if Mr Clark had acted in accordance with the dictates of proper practice and his own advice, it is likely on a balance of probabilities that:

(1) Kotecha & Co would have come off the record for Ramila in the Part 20 claim;

(2) SPC would have obtained a default judgment against Ramila and an order for its costs of the Part 20 claim against her;

(3) SPC would have attempted to enforce its judgment and/or costs order against the properties registered in Ramila's name at HM Land Registry, including 8 Ickleton Road;

(4) In response, Ramila would have intervened in the original action and put forward then the case she is maintaining now in the present proceedings.

682. In cross-examination Mr Clark accepted that it was possible that such a course of events would have taken place if he had acted in accordance with his own advice and admitted that by not so acting, and by filing a defence to the Part 20 claim in Ramila's name, he "effectively prevented that course of action from occurring"^[305]
683. Had SPC known the true facts, it would not have settled the claims against Ramila and Glen in 2002 for the trivial sum of £50,000, when the evidence suggested that the value even in 1988 of the ex-SPC properties registered in the names of Glen and Ramila was in excess of £2 million. This can be seen in this passage of the unchallenged evidence of Mr Wheeler:

"28. If I had been aware of these matters in June 2002 I would not have recommended to our Clients to settle the claims against Glen and Ramila for £50,000. I say this for the following reasons. In the first place, the settlement did not conclude the action. Our Clients still had to face [Subhash's] claims for fees and interest exceeding £1 million and the legal and other costs that would thereby be incurred. In the second place, had I been aware that Ramila and Glen were effectively [Subhash] in another guise, I could have invited the Court to order single representation for "Thakrar/Ramila/Glen" which would have avoided our Clients' having to face the prospect of three sets of costs rather than one. In other words, our Clients could in any event have avoided the costs going forwards that was one of the incentives to settle with Ramila and Glen. Thirdly, and perhaps most importantly, it would have become obvious to my firm and counsel, and we would so have advised our Clients, that if our Clients succeeded in their counterclaim against [Subhash] (in circumstances where the claim and counterclaim were proceeding in any event), they would necessarily succeed also against Ramila and Glen. They would succeed against Ramila, because she was making no claim to the [SPC] properties in any event, and they would succeed in their claim against Glen because Glen could have no possible defence of bona fide purchaser for value. At best it was a mere volunteer – the vehicle in the name of which the fraudster, [Subhash], had the [SPC] properties registered. In other words, exactly the same proceedings which in the event took place and resulted in judgment against [Subhash] would, without more, have resulted in judgment against Ramila and Glen.

29. I was aware that the value of the portfolio registered in the name of Glen as at June 2002 was in the millions, and in any event far in excess of the £50,000 offered or purportedly offered on behalf of Ramila and Glen. Had I been aware that the defences to our Clients' claims run or purportedly run in the name of Ramila and Glen were being run in bad faith, and that the offer of compromise was put forward on their behalf notwithstanding that [Subhash] knew or must have known of their falsity, I would not have recommended to our Clients that they accept it. Had I not recommended the offer, I believe our Clients would not have accepted it." ^[306]

684. The unchallenged evidence of Rosemary and Kenneth is that, if Nicholas Drukker & Co had not recommended to them the terms of settlement contained in the Compromise Agreement, they would not have agreed to a compromise on those terms.^[307]
685. It therefore follows that neither the Compromise Agreement nor the Consent Order would have been entered into by SPC.

12.9 Conclusion

686. On the strength of the evidence set out or referred to previously, it now appears that:

(1) Ramila was not an active participant in the litigation, knew nothing about it, did not instruct or authorise Mr Clark or Kotecha & Co to act for her in the litigation and did not instruct or authorise Mr Clark or Kotecha & Co to settle the litigation against her on her behalf or to enter into the Compromise Agreement or to agree to the making of the Consent Order. In short, she was neither a party to SPC's Part 20 claim nor a party to the Compromise Agreement purportedly executed on her behalf or the Consent Order purportedly made at her request.

(2) Ramila was not a party independent of Subhash but in fact Subhash by another name.

(3) Glen was not a party independent of Subhash but in fact Subhash by another name, in that Subhash was the directing mind and will of Glen and Glen merely the alter ego of Subhash.

(4) Glen maintained a defence to SPC's claim, namely that Glen was a bona fide purchaser for value from Ramila of SPC's property portfolio, that Subhash, and hence Glen, knew to be false, because:

(i) Glen was not a purchaser of the portfolio because it did not in reality furnish any consideration for the portfolio; and

(ii) Subhash was or must have been aware:

(a) that SPC's property portfolio was transferred from SPC into the name of Ramila without the agreement or authorisation either of SPC or Ramila; and

(a) that the ex-SPC properties were then transferred out of the name of Ramila into the name of Glen without the agreement or authorisation of Ramila.

687. Overall, SPC in settling, and both Rosemary and Kenneth in authorising SPC's settlement, were misled by the dishonest and fraudulent misrepresentations into agreeing to a compromise that they would not have done had Subhash not deliberately misled them. Subhash was aware of all the matters summarised in the previous paragraph and also knew, or ought to have known that SPC would not have agreed to settle had Glen's true position not been so seriously misrepresented.

13 Court of Appeal

688. Three matters of significance are now known:

(1) Subhash was the driving hand behind the Thakrar Family members' application to appeal and the various applications made to the Court of Appeal, including the application made in November 2006, to seek directions for a re-listing of the appeal.

(2) Subhash provided the funds directed to be paid into court by raising money on a property which is registered in the name of his two children but which he bought for them and appears to have a beneficial interest in. At all events, he was the source of, and driving force behind obtaining this security and his siblings have not had to fund any of the sum.

(3) The story told to the Court of Appeal by way of explanation as to why the Thakrar Family had no funds to use to pay into court was a lie from start to finish. There was no investment in India, there was no loan from Mr Harjivan and there is no liability to repay Mr Harjivan.

14 Contribution

14.1 Issues

689. Subhash raised contribution claims in Action no. 1 which he maintains are still on-going and capable of being pursued. These claims vested in his Trustee and Party 1 contends that she discontinued these claims or consented to their dismissal so that they cannot be revived. In any event, she has elected not to proceed with them and she cannot be made to continue with them save by court order which would not be made even if Subhash applied for it. Finally, and in any event, no new claims could be made since they would be barred by limitation, a court would not allow the existing claims to proceed since they are bound to fail and, in any case, Subhash's conduct in trial no. 1 and the delay that has been occasioned by his conduct since would lead to a court striking them out as being an abuse of process.
690. The following issues arise:

(1) What claims could Subhash have maintained for contribution and against whom?

(2) Were these claims dismissed in a way that precludes their revival?

(3) If they may be revived, who must pursue them and what, if anything, must Subhash do to force their revival?

(4) Are these claims bound to fail if revived?

(5) May new claims be started for contribution and, if so, would they be barred by limitation?

14.2 What claims could Subhash have maintained for contribution and against whom?

691. I will not seek to answer this question in this fact-finding judgment since it does not currently arise. Currently, I am only concern with a claim for contribution that was raised by Subhash against Kenneth and Rosemary and Party 4 in its role as representing the Estate of Neil.
692. 3 Were these Claims Dismissed in a Way that Precludes their Revival?
693. Following the orders made in relation to Judgment nos. 1 and 2, the court made this procedural order dated 27 July 2005:

"It is ordered as follows:

By consent between Group 2, Group 4 and the Trustee, that unless that Trustee shall by 10 August 2005 apply to the Court for directions in relation to the contribution proceedings against Group 2 and against Group 4 and in relation to any application for permission to appeal, such proceedings shall be dismissed on that day without further order of the Court."

694. By a letter dated 10 August 2005, the Trustee's solicitors, RHF Solicitors, wrote to the clerk to Judge Thornton at the TCC the following letter:

"Dear Sirs

SK Thakrar & Co v Suburban Property Company Ltd & Others HT-01-151

We act for the Trustee in Bankruptcy of Subhash Thakrar, the former proprietor of SK Thakrar & Co and enclose our notice of acting which we should be grateful if you would place upon the court file.

We confirm also the trustee's position regarding the following issues:

The trustee wishes to take no further proceedings in connection with the contribution proceedings against Group 2 and Group 4. …".

695. In the light of that letter and the previous order, the contribution proceedings were dismissed on 10 August 2005 and they may not be revived. The Trustee subsequently informed the parties of the reasons for her taking that decision not to proceed with the contribution proceedings. These reasons were, of course reached on 10 August 2005 in the light of facts and matters as they stood at that time.
696. The reasons were:

(1) The Trustee had no funds to continue with the application. This position was conveyed to Subhash through his solicitors and he was told that if the application was to continue there would have to be third party funding procured by him. No positive response which provided funding or indicated that third party funding would be made available was received to that letter and the Trustee proceeded on the basis that Subhash was not going to provide or procure third party funding.

(2) A possible assignment of the claim was also mentioned but Subhash did not provide the name of anyone to whom the claim could be, or should be assigned.

(3) The perceived weakness of the claim because the contribution claim was unlikely to be brought within the provisions of the Contribution Act and so was doomed to fail and because the parties against whom the claim would be brought had no funds to meet the claim even if it was successful. Reliance was placed on the decision of the House of Lords in Dubai Aluminium v Salaam^[308].

697. These were good reasons, indeed no Trustee of Subhash's estate on 10 August 2005 could reasonably have taken any other decision in the light of the factors summarised above which were governing the decision when it was taken.
698. 3 May new claims be started for contribution and, if so, would they be barred by limitation?
699. In principle, a new contribution claim may be started where an earlier claim has not been pursued. It would be a difficult question whether the effect of the procedural barring order made by the court could be circumvented by a fresh contribution claim being made. Moreover, a new claim must be brought within two years of the contribution claim accruing which occurred on 8 November 2004 when the relevant judgment, "damage" in the language of the Contribution Act, was entered. A new claim could only have been started by the Trustee since the claim vested in her when Subhash was made bankrupt by virtue of his property, which includes all things in action and every description of property wherever situated, see sections 306 and 283 of the Insolvency Act 1986. The Trustee did not seek to institute a fresh contribution claim.

14.4 Conclusion – Contribution

700. Subhash's claim for contribution against Parties 2 and 4 was dismissed on 10 August 2005 and may not be revived. A fresh claim may no longer be brought since it became statute-barred on 8 November 2006 and therefore had to be started by the Trustee. The Trustee did not start such a claim. No-one else, including Subhash, was capable of starting such a claim, even if they attempted or purported to give notice of a fresh contribution claim. It follows that neither Subhash nor his estate has a claim for contribution that may be started or pursued against either Party 2 or Party 4 or against anybody else arising out of the Judgment nos. 1 and 2.

15 Administration

15.1 Introduction

701. The complexities of the Thakrar Litigation were further compounded when the directors of Glen apparently resolved on 13 April 2007 to appoint Mr Stephen Cork and Ms Joanne Milner as administrators (for convenience referred to as "the administrators") under paragraph 22 of Schedule B1 to the Insolvency Act 1986. This was an out of court appointment under the relatively new procedure introduced by the Enterprise Act 2002.
702. The purpose of administration is defined in paragraph 3(1) of Schedule B1 to be to:

Rescue Glen as a going concern; or

Achieve a better result for Glen's creditors as a whole than would be likely if the company were wound up (without first being in administration); or

Realise property in order to make a distribution to one or more secured or preferential creditors.

703. The immediate consequence for Glen and the other parties to the Thakrar Litigation of this out of court appointment of administrators was four-fold, namely:

(1) The management of Glen was taken over by the administrators and the directors ceased to have any authority to act in relation to, or to manage, Glen's affairs whilst the administration remained in place.

(2) The administration placed a moratorium on the payment of Glen's debts whilst the administrators sought to achieve the statutory purposes of the administration.

(3) An immediate statutory stay was placed on all claiming parties' claims and applications against Glen, although not those against Mr Harjivan personally, since legal proceedings against a company at the time it was placed in administration and thereafter may not be continued or started without the leave of the administrators or the court.

(4) Unless the administration ceased, Glen's liabilities including any liability to pay or account to Party 2 and to pay any costs awarded against it in favour of other parties to the Thakrar Litigation would have to be dealt with through the process of administration rather than being under the direct control of the court. This could have serious and significantly prejudicial consequences for at least some of the claiming parties.

704. Although the administrators are appointed by the directors without court involvement, it is a statutory requirement that the appointment is lodged at court and is allocated a court case number and a file is opened. It was pursuant to this formal statutory engagement of the Companies' court that various procedural applications have been made. First and foremost, the parties consented to the relevant process being transferred to the TCC to be joined into the Thakrar Litigation. Secondly, the administrators have consented to the fact-finding trial no. 2 continuing up to the stage of the handing down of judgment. I have ruled that the effect of that consent is that the statutory stay has been lifted in relation to the handing down of judgment, to the formal process of the entry of the judgment as an order of the court, to the entry of the consequent declarations giving effect to my findings of fact in the judgment as an order of the court and to any consequential application relating to the terms of the order or orders giving effect to that judicial process. The statutory stay will then be re-imposed unless the administration has ceased or there has been a further lifting of the statutory stay in relation to further proceedings in the Thakrar Litigation.
705. A series of applications have been made by Parties 1 and 4 challenging the validity of the administrators' appointment and the motive of the directors in appointing administrators and by the directors by way of response. These and the responsive applications are based on paragraph 81 of Schedule B1. The applications were:

(1) For a declaration that the administration was invalid as not having been properly started since an essential prerequisite of appointment, being the service of a notice of the directors' intention to appoint administrators in advance of the decision to appoint on Teso as a qualifying floating chargeholder as required by paragraph 23 of Schedule BI, was not carried out;

(2) In the alternative, for a declaration that the administration was invalid because Glen was not insolvent at the time of the administrators' appointment;

(3) For an order under paragraph 81(1) that the appointment of the administrators should cease to have effect on the grounds that the directors who appointed them did so for an improper motive.

(4) For an order under paragraph 81(3)(d) affirming the administration or directing that the administration should only cease with effect from the day of the order. The purpose of such an order would be to:

(i) Ensure that there is no hiatus or void in the management of Glen and its liabilities following the cessation of the administration;

(ii) Ensure that there was no return to the status quo ante which everyone accepts is unworkable; and

(iii) Ensure that the administrators can claim their remuneration from Glen's assets despite any improper motive that had led to their appointment.

15.2 Procedural matters

706. By the end of trial no. 2, the hearing of the applications spanned 4 working days on 4 May, 5 and 6 June and 24 September 2007. Witness statements were submitted by Ms Milner, one of the two administrators; Mr Shelton, one of the directors; Mr Stubbs, the partner and file holder of the firm of solicitors, Beachcroft, who had been retained by the administrators to act for the administrators; Subhash; Mukesh and Kishan. Mr Stubbs' witness statement was not formally prepared but consisted of a note exhibited to one of Ms Milner's witness statements. Subhash's witness statement ran to many pages, most of which were not concerned with the administration applications which he had volunteered without being under any pressure or obligation to serve it. He served it on all parties. He was briefly cross-examined on the passages concerned with the administration. Mukesh and Kishan were also briefly cross-examined about the suggestion that Subhash and the Thakrar family provided the necessary funding to initiate the administration having provided some written information at the request of Parties 1 and 4.
707. The applications advanced by Parties 1 and 4 were advanced against the directors, Mr Harjivan, Mr Shelton and Ms Avni Bhatt. Mr Harjivan was, of course, already a party. The directors applied to me for an order allowing them funds from Glen in order to fund representation to enable them to oppose Parties 1 and 4's applications. Given the importance to them in both professional and financial terms of this application, I allowed limited funding to be paid by the Receiver of Glen's rents for this purpose. I also directed that the three directors should be made a new party to the Thakrar Litigation, Party 20. Thus, Mr Harjivan was a separate party for all matters arising from his role as a director of Glen to his role as an individual defending claims to shareholdings in Glen and Teso for which he had an interest or a claimed interest. Mr Arden QC instructed by Scott & Co represented the directors. As it turned out, the directors were not represented on the fourth day of the hearing because their funding had been exhausted and they appear to have elected not to apply for a further tranche of funding. That was a decision that they took and was therefore a conscious waiver of their right to legal representation on that final and significant hearing day.
708. The administrators elected not to appear at the hearing, quite properly taking a disinterested role. Ms Milner was prepared to provide detailed evidence and to be cross-examined on three separate occasions and Mr Stubbs also voluntarily tendered himself for cross-examination on his informal statement. However, when it became clear that the entire validity of the administration was to be challenged and the professional integrity of the administrators and their solicitors were also to be impugned, the administrators appeared by Mr Collings QC instructed by Beachcroft at the fourth and final hearing day and in post-hearing submissions relating to validity. This decision to be represented on the fourth hearing day was an entirely reasonable one, particularly as the directors had elected to be unrepresented on that day.
709. The reason for the protracted hearing was two-fold. Firstly, it was necessary to examine much background material which had emerged in the Thakrar Litigation in order to probe the directors' contention that they had independently decided to place Glen into administration essentially because it was unable to pay its debts. Much of this material had to be deployed to enable Parties 1 and 4's case to be put, namely that the administration was orchestrated by Subhash as the last of a long line of delaying tactics aimed at derailing the Thakrar Litigation so as to prevent the inevitable findings of fraud and dishonesty that would otherwise emerge. Given their recent and untutored arrival into the Thakrar Litigation, none of this material had been seen by or known to Ms Milner or the administrators' legal team and Mr Shelton had been less than forthcoming in revealing it to them or addressing it in evidence or cross-examination.
710. The second reason for the prolongation of the hearing was that Party 1, in her capacity as Subhash's Trustee, obtained from the Bankruptcy Registrar, after the close of the hearings, a second search and seizure order and, using that order, searched Subhash's premises and discovered, obtained and was granted permission by the Registrar to deploy, a wealth of highly material documentation which led to the re-opening of the hearing following a successful application to me. This material has enabled me to be entirely satisfied that the administration really was orchestrated by Subhash for the ulterior purpose of derailing the Thakrar Litigation just as the final whistle was about to be blown and once all else of his abusive behind the scenes manoeuvres had failed.

15.3 Issues requiring resolution

711. When the dust finally settled on the paragraph 81 application with the related applications and their rapid expansion into a full-blown trial in its own right, the following issues must be resolved:

(1) What is the relevant factual background that must be considered when determining who was responsible for appointing the administrators, for funding the administration and what their motives were in appointing the administrators and whether the necessary statutory prerequisites for such an appointment were present?

(2) What was Subhash's involvement in the appointment decision, if any and who funded the appointment of the administrators?

(3) Did the directors ever formally appoint the administrators?

(4) May Parties 1 and 4 now allege that there was a procedural irregularity in the appointment process?

(5) Were any necessary procedural requirements for a valid appointment of the administrators complied with and what is the effect of any non-compliance?

(6) Were the necessary prerequisites for appointment present in this case, particularly that relating to showing that Glen was unable to pay its debts at the time of appointment?

(7) Was Party 1 a "Receiver" as defined by paragraph 41(1) of Schedule B1?

(8) By applying the appropriate three-stage test, were the appointers of the administrators influenced by an improper motive?

(9) Were the administrators or their legal advisors at fault in any relevant respect in their advice or actions in relation to the administration?

(10) Should the appointment of the administrators cease to have effect or be treated as invalid and, if so, at what specified time?

(11) How should Glen be administered and/or managed in the future?

(12) In the light of the answers to these questions, what relief, if any, should the court grant under paragraphs 11, 81(1) or 81(3) of Schedule B1 or under Section 51 of the Supreme Court Act 1981 and/or the CPR or otherwise in relation to the control, administration and management of Glen?

(13) What costs, from which date and from whom, may the administrators claim their fees, costs and expenses incurred in connection with the administration?

15.4 Paragraph 81 and other relevant provisions of Schedule B1 to the Insolvency Act 1986

15.4.1 Schedule B1 to the Insolvency Act 1986

712. Schedule B1 was introduced into the Insolvency Act 1986 by the Enterprise Act 2002 to replace the previous administration regime in sections 8 to 27 of the Insolvency Act 1986 Act. A novel feature of the then new regime, which has now been in operation for some five years, is the ability for specified persons, including the directors of a company, to make an out of court appointment of an administrator or a pair of administrators. Paragraph 81, which was an entirely new provision, provides the means for any creditor to challenge that appointment. Clearly Parties 1 and 4, with their current entitlement to costs and Party 2, with its claims for damages or restitutionary relief, are creditors for this purpose. This ability to challenge an out of court appointment is particularly important as a safeguard since any such appointment will not have been the subject of prior creditor or public judicial scrutiny
713. The cessation of an out of court appointment made by directors would not inhibit a later appointment by the court, even within 12 months. However, paragraph 23(2) of Schedule B1 provides prevents the directors of the company making a second or subsequent out of court appointment of administrators within 12 months of the cessation of the previous out of court appointment.
714. There is, evidently, as yet no authority which has interpreted paragraph 81 or explained the circumstances when paragraph 81 should be applicable.
715. 4.2 Paragraph 81 of Schedule B1
716. Paragraph 81 of Schedule B1 to the Insolvency Act 1986 provides, in so far as relevant, as follows :

"Court ending administration on application of creditor

(1) On the application of a creditor of a company the court may provide for the appointment of an administrator of the company to cease to have effect at a specified time.

(2) An application under this paragraph must allege an improper motive –

(a) …..

(b) ….., on the part of the person who appointed the administrator.

(3) On an application under this paragraph the court may –

(a ) adjourn the hearing conditionally or unconditionally;

(b ) dismiss the application;

(c ) make an interim order;

(d ) make any order it thinks appropriate (whether in addition to, in consequence of or instead of the order applied for)."

15.4.3 Other relevant provisions of Schedule B1

717. There are a number of other relevant provisions of Schedule BI which should be set out:

"Administration

2 A person may be appointed as administrator of a company—

(a) by administration order of the court under paragraph 10,

(b) by the holder of a floating charge under paragraph 14, or

(c) by the company or its directors under paragraph 22.

Purpose of administration

3 (1) The administrator of a company must perform his functions with the objective of—

(a) rescuing the company as a going concern, or

(b) achieving a better result for the company's creditors as a whole than would be likely if the company were wound up (without first being in administration), or

(c) realising property in order to make a distribution to one or more secured or preferential creditors.

(2) Subject to sub-paragraph (4), the administrator of a company must perform his functions in the interests of the company's creditors as a whole.

(3) The administrator must perform his functions with the objective specified in sub-paragraph (1)(a) unless he thinks either—

(a) that it is not reasonably practicable to achieve that objective, or

(b) that the objective specified in sub-paragraph (1)(b) would achieve a better result for the company's creditors as a whole.

(4) The administrator may perform his functions with the objective specified in sub-paragraph (1)(c) only if—

(a) he thinks that it is not reasonably practicable to achieve either of the objectives specified in sub-paragraph (1)(a) and (b), and

(b) he does not unnecessarily harm the interests of the creditors of the company as a whole.

4 The administrator of a company must perform his functions as quickly and efficiently as is reasonably practicable.

Status of administrator

5 An administrator is an officer of the court (whether or not he is appointed by the court).

Administration order

10 An administration order is an order appointing a person as the administrator of a company.

Conditions for making order

11 The court may make an administration order in relation to a company only if satisfied—

(a) that the company is or is likely to become unable to pay its debts, and

(b) that the administration order is reasonably likely to achieve the purpose of administration.

Powers of court

13 (1) On hearing an administration application the court may—

(a) make the administration order sought;

(b) dismiss the application;

(c) adjourn the hearing conditionally or unconditionally;

(d) make an interim order;

(e) treat the application as a winding-up petition and make any order which the court could make under section 125;

(f) make any other order which the court thinks appropriate.

(2) An appointment of an administrator by administration order takes effect—

(a) at a time appointed by the order, or

(b) where no time is appointed by the order, when the order is made.

(3) An interim order under sub-paragraph (1)(d) may, in particular—

(a) restrict the exercise of a power of the directors or the company;

Power to appoint

22 (1) A company may appoint an administrator.

(2) The directors of a company may appoint an administrator.

Restrictions on power to appoint

23 (1) This paragraph applies where an administrator of a company is appointed—

(a) under paragraph 22, or

(b) on an administration application made by the company or its directors.

(2) An administrator of the company may not be appointed under paragraph 22 during the period of 12 months beginning with the date on which the appointment referred to in sub-paragraph (1) ceases to have effect.

Notice of intention to appoint

26 (1) A person who proposes to make an appointment under paragraph 22 shall give at least five business days' written notice to—

(a) any person who is or may be entitled to appoint an administrative Receiver of the company, and

(b) any person who is or may be entitled to appoint an administrator of the company under paragraph 14.

(2) A person who proposes to make an appointment under paragraph 22 shall also give such notice as may be prescribed to such other persons as may be prescribed.

(3) A notice under this paragraph must—

(a) identify the proposed administrator, and

(b) be in the prescribed form.

27 (1) A person who gives notice of intention to appoint under paragraph 26 shall file with the court as soon as is reasonably practicable a copy of—

(a) the notice, and

(b) any document accompanying it.

(2) The copy filed under sub-paragraph (1) must be accompanied by a statutory declaration made by or on behalf of the person who proposes to make the appointment—

(a) that the company is or is likely to become unable to pay its debts,

(b) that the company is not in liquidation, and

(c) that, so far as the person making the statement is able to ascertain, the appointment is not prevented by paragraphs 23 to 25, and

(d) to such additional effect, and giving such information, as may be prescribed.

(3) A statutory declaration under sub-paragraph (2) must—

(a) be in the prescribed form, and

(b) be made during the prescribed period.

(4) A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—

(a) which is false, and

(b) which he does not reasonably believe to be true.

28 (1) An appointment may not be made under paragraph 22 unless the person who makes the appointment has complied with any requirement of paragraphs 26 and 27 and—

(a) the period of notice specified in paragraph 26(1) has expired, or

(b) each person to whom notice has been given under paragraph 26(1) has consented in writing to the making of the appointment.

(2) An appointment may not be made under paragraph 22 after the period of ten business days beginning with the date on which the notice of intention to appoint is filed under paragraph 27(1).

Notice of appointment

29 (1) A person who appoints an administrator of a company under paragraph 22 shall file with the court—

(a) a notice of appointment, and

(b) such other documents as may be prescribed.

(2) The notice of appointment must include a statutory declaration by or on behalf of the person who makes the appointment—

(a) that the person is entitled to make an appointment under paragraph 22,

(b) that the appointment is in accordance with this Schedule, and

(c) that, so far as the person making the statement is able to ascertain, the statements made and information given in the statutory declaration filed with the notice of intention to appoint remain accurate.

(3) The notice of appointment must identify the administrator and must be accompanied by a statement by the administrator—

(a) that he consents to the appointment,

(b) that in his opinion the purpose of administration is reasonably likely to be achieved, and

(c) giving such other information and opinions as may be prescribed.

(4) For the purpose of a statement under sub-paragraph (3) an administrator may rely on information supplied by directors of the company (unless he has reason to doubt its accuracy).

(5) The notice of appointment and any document accompanying it must be in the prescribed form.

(6) A statutory declaration under sub-paragraph (2) must be made during the prescribed period.

(7) A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—

(a) which is false, and

(b) which he does not reasonably believe to be true.

30 In a case in which no person is entitled to notice of intention to appoint under paragraph 26(1) (and paragraph 28 therefore does not apply)—

(a) the statutory declaration accompanying the notice of appointment must include the statements and information required under paragraph 27(2), and

(b) paragraph 29(2)(c) shall not apply.

Commencement of appointment

31 The appointment of an administrator under paragraph 22 takes effect when the requirements of paragraph 29 are satisfied.

32 A person who appoints an administrator under paragraph 22—

(a) shall notify the administrator and such other persons as may be prescribed as soon as is reasonably practicable after the requirements of paragraph 29 are satisfied, and

(b) commits an offence if he fails without reasonable excuse to comply with paragraph (a).

Dismissal of administrative or other Receiver

41 (1) When an administration order takes effect in respect of a company any administrative receiver of the company shall vacate office.

(2) Where a company is in administration, any receiver of part of the company's property shall vacate office if the administrator requires him to.

Moratorium on other legal process

43 (1) This paragraph applies to a company in administration.

(2) No step may be taken to enforce security over the company's property except—

(a) with the consent of the administrator, or

(b) with the permission of the court.

…

(4) A landlord may not exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company except—

(a) with the consent of the administrator, or

(b) with the permission of the court.

…

(6) No legal process (including legal proceedings, execution, distress and diligence) may be instituted or continued against the company or property of the company except—

(a) with the consent of the administrator, or

(b) with the permission of the court.

(7) Where the court gives permission for a transaction under this paragraph it may impose a condition on or a requirement in connection with the transaction.

(8) In this paragraph "landlord" includes a person to whom rent is payable."

15.5 Appointment by Glen's directors

718. On 13 April 2007, Mr Shelton, Mr Harjivan and Ms Avni Bhatt, acting as Party 14's directors apparently resolved to place Party 14 in administration and, acting on their behalf, Mr Shelton appointed the administrators as joint administrators. Both administrators are licensed Insolvency Practitioners at Smith & Williamson who are a large firm of United Kingdom-based Chartered Accountants and Mr Cork and Ms Milner are members of its department concerned with administration and similar matters. There was no known previous relationship or contact between Glen and Mr Shelton and any member of Smith & Williamson and the initial contact was as a result of Mr Shelton seeking a recommendation from the solicitor who had acted for Glen in the past, Mr Conway of Dechert LLP, for appropriate Insolvency Practitioners who might act as administrators and he had recommended Mr Cork as someone he might talk to. The first approach made by Mr Shelton to Mr Cork was a day or two before 21 February 2007 and the purported appointment occurred on 13 April 2007.
719. The appointment, made under the relatively new procedure without first obtaining the court's sanction, was formalised by the lodging at court of a statutory declaration made by Mr Shelton giving notice of the appointment of administrators together with (a) the minutes of a board meeting dated 13 April 2007 and attaching a purported creditors' schedule, and (b) the administrators' consents to act. These documents gave rise to the allocation of a court case number and to the opening of a file under the reference 2706/2007.

15.6 Factual matrix to the administrators' appointment

15.6.1 General background

720. By January 2007, when Mr Shelton contended he first considered the possibility of placing Glen into the hands of administrators, Glen's Walter Mitty-like existence had been in place for nearly 17 years. Glen had been conceived and has always operated as the means whereby Subhash sought to hide and protect from the world his ill-gotten property portfolio. Until his scheming unravelled during and following trial no. 1, Subhash was the beneficial owner of Glen and its assets who was in sole control of its administration and management and was in sole command of the professional accountants, lawyers and company administrators who acted for Glen or its reputed owners. He had succeeded in this web of deception by hoodwinking those professionals with a repeated series of lies, acts of dishonesty, forgery and deceit into accepting that the company was owned by wealthy overseas clients for whom Subhash had powers of attorney and in whom they had entrusted all management and investment decisions relating to their assets. His success had been built on the silent compliance of his siblings, particularly Mukesh, Vijay, Kishan and Sheela, particularly in the years since 2001 when he had had to appear to have distanced himself from their involvement in the Thakrar Litigation. Subhash is a very gifted, albeit a very flawed, individual and one of his gifts is an ability to manipulate and control those with less forceful personalities, particularly if they are closely related to him or are in close professional or personal relationship with him.
721. By January 2007, Subhash's grip over Glen had been weakened to virtually vanishing point and his dogged and remarkably persistent attempts to throw off the tightening noose around what he still sees as his assets, namely the property portfolio held by Glen. This noose was in the form of the Thakrar Litigation, particularly in the form of Party 1's claim to take over and assert her beneficial ownership of Glen's shares, Party 2's claim to recover in excess of £5 million under its judgment sum from Subhash and its claimed entitlement to its beneficial ownership of many of Glen's properties, Party 3's claim to recover its inheritance under William's will, Party 4's claim to huge costs and Party 5 and 6's wish to clear their name from its unlawful and unasked for use by Subhash in furtherance of his dishonest grand design.
722. Subhash was getting desperate by early 2007 because his last remaining attempts to disrupt or derail the Thakrar Litigation had failed. These last two pieces of the end-game were (1) the attempt made by the defending parties to persuade Judge Coulson in trial no. 3 that the claiming parties, by virtue of one letter written by Party 2's solicitors, had succeeded in achieving a binding compromise of the entire Thakrar Litigation and (2) the attempt by Glen and others to mount a successful recusal and abuse of process argument. Judge Coulson's judgment no. 3 ended the first of these stratagems and the wholly unsuccessful attempts of Parties 8 – 12, 14, 16 and 18 to mount a recusal and abuse of process argument ended the second stratagem. It is clear that Subhash first decided to instruct or forcefully persuade Mr Shelton to consider the appointment of administrators for Glen once he realised that both of these disruptive and deleting stratagems had failed.
723. The following findings made earlier in this judgment are relevant:

(1) Subhash had always been the beneficial owner of Glen and its shares and property holdings and other assets.

(2) Subhash retained an iron grip over the administration and management of Glen and only allowed Mr Shelton and the directors to undertake those tasks that he had expressly authorised or directed.

(3) Subhash was, and acted as, a shadow director of Glen and the nominated directors merely acted as his servants undertaking what he directed without question.

(4) Subhash resorted to a series of fraudulent, dishonest and unlawful acts and actions over the entire history of Glen in order to persuade everyone who came into contact with Glen that he was always acting for the overseas and wealthy beneficial owner (i.e. Ramila, Vijaya and Mr Harjivan) pursuant to a general power of attorney in his twin capacities of manager of their assets and their accountant.

(5) Once Subhash's control and ownership of Glen and its assets become under greater and greater threat from the Thakrar Litigation, he resorted to a series of more and more desperate stratagems, most of which were unlawful and/or dishonest, in an attempt to retain control of his ownership of Glen and is assets and to put those assets beyond the impending clutches of his creditors and opposing parties.

(6) Neither Mr Shelton or the directors or nominal shareholders of Glen exercised any control over Glen or its affairs.

724. Subhash's control, or attempted control, of Glen continued throughout the entirety of the Thakrar Litigation and was only slowly weakened by Subhash's voluntary bankruptcy and the appointment of his Trustee in 2005; the knowledge of Glen's affairs obtained from the documents downloaded from Subhash's hard drive pursuant to the search and seizure orders executed in 2005 and July 2007; the world-wide freezing orders imposed over Glen and its assets; the appointment of a Receiver under section 37 of the Supreme Court Act 1981 on 2 August 2006 of Glen's rents and profits and the knowledge of the extent of his dishonesty obtained from the evidence of Ramila and Vijaya.
725. Subhash's control of the defending parties' cases presented at trial no. 2 extended to:

(1) Drafting the entirety of Mr Harjivan's written evidence and either drafting or assisting in the drafting of the written evidence of the Thakrar siblings who gave evidence during trial no. 2.

(2) Coaching Mr Harjivan and the Thakrar siblings in the evidence they should give when each was cross-examined before each entered the witness box. In Mr Harjivan's case, this coaching extended to putting forward and maintaining an incredible and deeply dishonest series of lies which he persuaded Mr Harjivan to modify between the first and second parts of his cross-examination in an attempt to repair the particularly glaring inconsistencies that had developed during the first part of that cross-examination.

(3) Directing Kiran what she should say and do when in court, ostensibly representing Party 16 as its director and lay representative.

(4) Being in frequent contact with Mr Shelton and, to a lesser extent Mr Barby, and suggesting what line should be taken by Glen and by whom at different stages of the trial and as to the contents of his written and oral evidence.

(5) Arranging for funding by way of borrowing against the security of his own property, albeit that this was nominally held in the name of his two children, to allow the Thakrar siblings to pursue their appeal.

(6) Arranging for funding by way of his borrowing or being gifted sums which he made available to his siblings to help fund their legal representation in the earlier stages of the litigation and by using funds taken from Glen for the purpose of funding Mr Harjivan and his siblings' legal representation in all aspects of the Thakrar litigation.

(7) Following the trial in all its intricacies by reading the transcript on a daily basis and by receiving detailed and daily reports from his wife and brothers, namely from Kiran, Mukesh and Vijay.

(8) Directing what documents should be obtained from the large number of solicitors who had represented Glen over the years, which should be disclosed and, so it would appear, which should be destroyed. This stratagem was only thwarted, albeit only partially thwarted, by the search and seizure orders, by the claiming parties obtaining documents by way of disclosure from several of Glen's solicitors and from Glen itself and from the Trustee after she had first obtained the permission of the Bankruptcy court for her use of documents obtained by her from the search and seizure warrants and other legitimate means.

726. 6.2 Events prior to the appointment of the administrators
727. According to Mr Shelton's evidence, the lead up to the appointment decision may be summarised as follows:

(1) Mr Shelton, so he asserted, on his own and without discussion or consultation with Subhash, first started considering the possibility of insolvency process for Glen in January 2007. This was for a number of reasons, principally the following:

(i) The failure of the compromise negotiations with the effect that, absent a finding that the compromise offer made by Nicholas Drukker, the litigation would continue.

(ii) The freezing orders and the Receivership had taken the management of Glen's income and properties out of the hands of its directors.

(iii) Glen's income was falling due to a wastage of tenants who were not being replaced as their tenancies came to an end.

(iv) Certain liabilities, particularly one owed to the Bank of Scotland in excess of £300,000, were not being paid by the Receiver.

(v) Glen's liability for costs was growing and would make serious inroads into its financial position.

(vi) Glen faced significant capital gains tax liabilities.

(vii) Mr Shelton's personal position as a director of Glen should Glen go into liquidation.

(2) Mr Shelton ruled out Jersey-based insolvency proceedings and a Jersey-based insolvency practitioner because this would be a controversial decision amongst the claiming parties and because the case would be unduly complex for a Jersey-based practitioner and would not be accepted as being correctly located in the local forum by the Jersey courts.

(3) Having obtained the current monthly receipts and payments details from Mr Patel, the Receiver's solicitor, and having obtained the recommended name of a recommended insolvency practitioner, Mr Shelton approached Mr Cork who advised that if his firm was put in funds by the directors of Glen to the extent of £20,000 and if legal advice suggested that administration was appropriate, his firm would accept the role of administrators appointed under Schedule B1.

(4) Mr Shelton arranged for Mr Harjivan to obtain £20,000 and once this was provided by him, he arranged for a meeting at Beachcroft's offices on 29 March 2007 attended by Mr Harjivan and himself and the prospective administrators, their solicitors and leading and junior counsel who advised, having taken detailed instructions, that an out of court administration appointment was appropriate.

(5) The directors considered this advice and, on 13 April 2007, decided to appoint the administrators and, following the lodging at court of the appropriate documents, these administrators took office on that day.

(6) The meeting held on 29 March 2007 was attended by Subhash, ostensibly as the interpreter for Mr Harjivan who also attended. Subhash is fluent in Gujarati and he spoke throughout in this language ostensibly translating to Mr Harjivan the contents of the discussion. His presence had not been announced in advance and he was firmly told by Mr Stubbs of Beachcroft that his contribution should be limited to the provision of translation services. There was no-one present who was able to monitor what Subhash was telling Mr Harjivan.

15.6.3 Mr Shelton's instructions and understanding of the process of administration

728. It is important to be aware of the facts and considerations that Mr Shelton omitted to inform his advisers at or before the meeting on 29 March or about which he conveyed an inaccurate impression. This is because those advisers were giving their advice on a seriously false basis. The significant errors or omissions were as follows:

(1) The advisers were informed that Party 1 was appointed a Receiver to the rents and profits of Glen based on her claim that she was the true beneficial owner of the shares of Glen. This seriously understated the reasons why Party 1 was appointed by the court, without an application from Party 1, as an interim Receiver of rents and profits following the conclusion of Mr Shelton's cross-examination on 2 August 2006 when he had revealed that he had no knowledge or control of Glen's HSBC bank account into which all rents and profits were being paid. Although this account was subject to a world-wide freezing order, it had become clear from other evidence received on 2 August 2006 that Subhash and Mukesh had not only exclusive control of this account but had procured payments out of it in clear breach of the terms of the freezing order. Since Mr Shelton had not sought to take over management responsibility for this account following the freezing order, it was clear that there was no control being exercised and no or inadequate attempts being made to ensure that Subhash and Mukesh complied with the terms of the injunction. Party 1's appointment was intended to be a short-term emergency measure pending the anticipated handing down of the fact-finding judgment in September 2006 but the antics of Subhash and Glen ensured that the length of the trial was prolonged for a further twelve months.

(2) He suggested that Party 1 had refused to pay debts of Glen and that he had been unable to pay them as a result. In fact, Party 1 was only the Receiver of rents, the responsibility for making payments in the ordinary course of business remained with Mr Shelton who had never attempted to exercise that responsibility either before or after Party 1's appointment. Mr Shelton's misconception of his role was compounded by his admission in cross-examination that he thought that Party 1 had been appointed as a Receiver and manager whereas she had been appointed by the court for a limited and specific purpose to receive rents as an adjunct to, and as the means of ensuring compliance with, the interim freezing injunctions granted by Lawrence Collins J. 12 months earlier in 2005.

(3) He suggested that he hoped that Glen would remain balance sheet solvent once the litigation had been concluded but that Party 1 did not want to settle with the litigation. In other words, he appears to have suggested that Glen could and should survive the litigation whereas the litigation was seeking a claim to the entirety of Glen's assets and to the entirety of the issued shares and was based on the alleged fraudulent asset-stripping by Subhash of one of the claiming parties in circumstances in which Subhash had already been found liable in fraud and had an outstanding judgment for in excess of £5 million which had caused him to declare himself a voluntary bankrupt as a means of avoiding making any payment towards this liability. He also appears to have explained that he considered that Glen was at serious risk in relation to the fraud allegations being made against it, as was exemplified by his recorded but confidential views about Glen's potential liability expressed in a memo in 2003 to Glen's solicitors.^[309]

(4) Mr Shelton suggested that Party 1 did not have a real grip on the situation, that she was being heavily led by her professional advisers, that she was treating the matter as a litigation matter and was not strongly concerned with the financial and commercial affairs of Glen. In fact, Party 1 was only a section 37-appointed Receiver whose role was to ensure compliance with the interim injunction. She was seeking to recover Subhash's estate which appeared to include the entirety of Glen's assets so that it was neither part of her role, as an officer of the court, nor realistic, for her to seek to do other than attempt to recover the entirety of Glen's assets which, in any event, Subhash had obtained and retained in circumstances amounting to fraud. The only live issue was whether the company had been sold to a genuine bona fide purchaser for value without notice, namely Mr Harjivan and, as Mr Shelton knew or ought to have known, Mr Harjivan had no realistic prospect of demonstrating that he was such a purchaser.

(5) Mr Shelton stated that he found it difficult if not impossible to have a sensible commercial relationship with the Receiver and her advisers. In fact, Mr Shelton had never attempted to evolve such a relationship, was neither aware nor concerned that he was the manager whose role was to keep Glen going as a going concern. Furthermore, as he admitted in evidence, he was aware that if he was having any difficulties with the Receiver, his first recourse should have been to apply to the court for directions given that the court had appointed her as an interim Receiver to police an interim injunction and had given Glen liberty to apply if this gave it any difficulties in relation to the running of its business.

(6) He said that most of the properties were subject to a charge in favour Teso the validity of which Party 1 was challenging in the litigation and that, as he recalled, I had dismissed the charges. In fact, Mr Shelton knew, and had already given evidence to this effect, that the charges were bogus, that Party 1 had a cast-iron case to have them removed and that I had only directed the vacation of charges over properties owned by Subhash in his own right and not those over which Glen was or claimed to be owner and that that removal was directed following his evidence at which he accepted that these charges were bogus.

(7) He stated that he had already told Teso's directors of the intention to place Glen into administration. There is no independent evidence to corroborate that statement and nothing has been disclosed by Mr Shelton which records that notification. In the light of other evidence^[310], I find that no such notification had been given to the directors of Teso who, in this context, means only Mr Barby.

(8) Mr Shelton was informed that the administrators would need to be advised fully about the Thakrar Litigation fully and as a matter of urgency. It is clear that Mr Shelton never attempted to summarise accurately the nature and extent of the allegations being made against Glen and left all explanations to Subhash. The administrators were clearly wholly unaware of how deeply implicated Glen was in allegations of fraud, warehousing of assets and the deceitful attempts to avoid execution against its ill-gotten gains. Mr Shelton was, at the very least, aware of the full extent of the allegations and claims being made against Glen.

(9) Mr Shelton indicated that it ought to be possible to promote a resolution of the litigation and the costs associated with it. Given the grave nature of the allegations being raised against Glen and the three mediations and other attempts to settle that had already occurred, it was wholly unrealistic and misleading to suggest that a settlement might be possible that would leave Glen solvent and either income or balance sheet solvent.

(10) Mr Shelton informed the advisers that, strictly speaking, Glen was off-shore and that the only reason why it might be an on-shore company in March 2007 was because Party 1 may have brought it on-shore since her appointment as Receiver. Mr Shelton knew that Party 1 and her appointment did not alter anything. In reality, Glen was managed entirely by Subhash from his Woolwich offices and had always been managed in that way. Mr Shelton's role was solely to persuade the Inland Revenue to accept Glen as an off-shore company for tax purposes notwithstanding Glen's complete association with and management from within the jurisdiction and its trading activities and assets consisting solely and exclusively with on-shore properties.

(11) Mr Shelton never attempted to explain that his role in Glen was purely to receive letters written to him by Subhash requiring him to undertake purely secretarial tasks and that Glen was managed, administered and run exclusively by Subhash from his Woolwich offices without any involvement of/or brake applied by the ostensible Directors. Nor did he explain how doubtful and dubious were the claims of Mr Harjivan to be the beneficial owner of Glen's shares nor his belief that Subhash had, at the very least, a large personal beneficial interest in Glen. These were particularly significant omissions given the presence of both Mr Harjivan and Subhash at the meeting and there being no means of checking that Subhash was strictly and faithfully sticking to the role of interpreter into the Gujarati language. The administrators would undoubtedly have probed very extensively into Subhash's involvement in Glen had Mr Shelton given them a full and accurate briefing and their advice might have been very different had this been done.

729. 6.4 Mr Shelton's motive in supporting administration for Glen
730. It is helpful to set out some passages of the cross-examination of Mr Shelton.

15.6.4.1 Alleged difficulties with Receiver and misconception that the Receiver was also the Manager of the properties.

712. "Q. Paragraph 5.2 [of your witness statement]. In the last sentence you suggest that Mrs Jackson is appointed, not just as Receiver of rents and profits, but also manager of the properties. That is not right, is it?

A. I think that is right, yes.

Would you like to see the order [of 2 August 2006 appointing Party 1 as Receiver]. …

A. I would like to see that, yes.

[Mr Shelton was shown a copy of the order]

A. "… to commence, prosecute defend and compromise proceedings",

that is hardly just collecting rents:

"… to do such other things and take such other steps as may be proper or necessary in the fulfilment of their duties called upon to receive the rents and profits."

I would take that as meaning that Mrs Jackson had a duty to rent out properties when they became vacant etc. I am sure that she has done that.

Judge Thornton: If it is suggested to you that there is not any express requirement to manage, and that, certainly in England, the duties of a Receiver of rents do not extend to managing the properties, would that come as any surprise to you?

A. It would. I understand the appointment form for Mrs Jackson to become Receiver, that she was managing the properties in such a way that she would maximise the returns for Glen. I believed that she had renewed certain leases. I believe that she had repaired certain properties, made certain payments etc. All of those, I would have thought, were the duties of a manager rather than someone receiving the rents."^[311]

713. "Q. The order under which the Receiver was appointed as an interim Receiver of rents and profits provides expressly for permission to come back on notice to the court.

A. Exactly.

Q. Did you not consider – you are a director, you are the managing director – it being in the interests of the company to draw all of this to the immediate attention of the court in relation to the Receiver?

A. In retrospect you are probably right, I should have done that. But at the time, as you know, we were conducting compromise negotiations with the various parties. Unfortunately, they failed. I have always been hopeful that the parties would get their heads knocked together and agree things so that we would not have these arguments between myself and Mr Patel, etc. But yes, in retrospect, perhaps I should have troubled his Lordship about the payments."^[312]

731. "Q. … in the form of shares there are a large number of Lloyd's TSB shares, which

if realised would come very close to discharging the liability to the Bank of Scotland, If permission was available for that use of the money?

A. That is not true.

Q. Perhaps you would tell his Lordship why that is not true?

A. That is not true for very good reasons, my Lord. Yes there were 50,000 Lloyd's TSB shares registered in the name of Anchor Trust, but unfortunately the trustee has made a claim for that in Subhash Thakrar's bankruptcy, so those shares would not be available without Mrs Jackson's other hat on.

That is an example of the sort of conflict that I feel is there, as Receiver and trustee in bankruptcy, because, on the one hand, perhaps, as the Receiver, she would like to see the shares realised and the money expended on paying off the bank loan, and, on the other hand, wearing her hat as the trustee, it is something she would not allow. So in my opinion those shares are not available to pay off the Bank of Scotland loan.

Q. Have you had any dialogue with Mrs Jackson wearing her hats?

A. I have not had that dialogue with Mrs Jackson, but I have seen the claims she makes in this – in the bankruptcy."^[313]

715. "Q. [quoting from Mr Shelton's witness statement] "… first I asked Mr Patel [the Receiver's solicitor] to obtain a statement from the Receiver in regard to the cash position of Glen. I did this on 5^th February." … But you asked Mr Patel?

A. Exactly.

…

Q. You are contacting Mr Patel, not because you want to communicate with the court-appointed interim Receiver, who is a court officer and established insolvency practitioner and you do not mention your concerns about insolvency?

A. No.

Q. Would you like to offer an explanation to his Lordship about why you do not do that?

A. In my opinion, it had little to do with Mr Patel. As you have just said, I am the director of the company, I have the control of the company in my hands. That was one of the few things that I could do.

Q. Do you recall why Mrs Jackson was appointed as interim Receiver?

A. Yes, I do.

Q. Would you tell his Lordship what your recollection of that is?

A. My recollection of that was that his Lordship was unhappy that I did not know of the monies that Mukesh had recently taken out of the SK Thakrar account to give to Mr Harjivan.

Q. Would it be right to say – we can look at the judgment … if we need to – that the judge expressed concern to protect the income stream for the benefit of creditors from potential abuse. Is that a fair summary?

A. I am not going to argue with that.

Q. Bearing that in mind that that is why Mrs Jackson was appointed to receive the income, do you not think it would have been relevant to tell this interim Receiver, who is an experienced insolvency practitioner, that you, the managing director of Glen, are asking for this information because you are concerned about the solvency position of the company of which you are managing director?

A. No, I certainly do not, because, as I have already stated, I was concerned about the conflict that Mrs Jackson had in the wearing of the two hats as trustee and Receiver.

Q. But she was wearing three hats, according to your evidence, because the third hat is she is managing the company, through paragraph 5.2 [of Mr Shelton's witness statement where he states that Mrs Jackson was appointed not just as Receiver of rents and profits but also as manager of the properties]?

A. I did not think she was wearing two hats. I thought the appointment of Receiver and manager was just one hat."^[314]

15.6.4.2 Relationship with Subhash

716. "Q. What about between the directors, yourselves, was there any communication before this meeting [the meeting held on 29 March 2007] between yourself and any of ht either directors?

A. Yes, there was.

Q. What was the communication?

A. The communication generally was about what was – what the purpose of going to Beachcroft's' offices was.

Q. Who did you speak to about that?

A. I spoke to Marina Buckley and Mr Harjivan, although I did not speak personally to Avni Bhatt.

Q. Do you know whether anyone did speak to Avni Bhatt?

Q. I understood that Subhash Thakrar was going to speak to her on my behalf.

A. Who briefed Subhash Thakrar on speaking to Avni Bhatt on your behalf?

A. I did.

Q. Why was it relevant to Subhash Thakrar to do that, rather than you communicating directly with your fellow director?

A. Because Subhash Thakrar knows Ms Bhatt on a more personal basis than I do.

Q. She is a director, can you not –

A. I could have done, but I chose to do it the other way.

Q. Does Subhash Thakrar have any continuing role in the company, Glen?

A. As far as I know, no. That would be up to the administrator.

Q. I am sorry, you are quite right to correct me. At that time, did Subhash Thakrar have any continuing role in Glen?

A. No.

Q. Your evidence in relation to the use of Subhash is simply that he knew Ms Bhatt on a more personal basis than you did?

A. Exactly.

Q. So you would have briefed Mr Subhash Thakrar on what he was to brief Miss Bhatt on?

A. Yes.

Q. What did you say to Mr Subhash Thakrar?

A. I spoke to him generally about – I thought that the best thing the company could do would be to place itself in administration, one of the reasons being to sort of try to put a stop to the sort of proceedings we're "enjoying today", and the consequent cost of it all. I look around here now and I think I was quite right.

Q. Was that only occasion on which you have spoke to Mr Subhash Thakrar about administration proceedings?

A. I think I have spoken to him before and since.

Q. Did you speak to him when Mr Conway put you in touch with Mr Cork?

A. No.

Q. So when do you think your first communication about administration was?

A. It would have been after my meeting with Mr Cork, although I could not tell you exactly.

Q. Anytime after 12^th March?

A. Sometime around there.

Q. Sometime after 12^th March. Was that before you spoke to Mr Harjivan about it?

A. That I cannot remember?

Q. So it might have been?

A. It might have been."^[315]

15.6.4.3 Position of Mr Harjivan

732. "Q. Do you believe Mr Harjivan to be the beneficial owner of the shares?

A. Mr Harjivan is the registered owner of the shares. I have not heard all the evidence, so I do not know. That is for his Lordship to decide, not me.

Q. It is of course for his Lordship to decide, but I am asking you as the Managing Director of the company, what your evidence is as to whom you, as the managing director of the company, believe the beneficial owner of the shares to be?

A. I have no position on that and I have given it no real thought."^[316]

15.6.4.4 COMI

718. "Q. As far as you are concerned, the COMI is a bit of a flag of convenience; it drifts around according to what suits the purposes of the company at any particular time?

A. It can always do that, yes.

Q. That is your firm belief?

A. That is my firm belief, yes.

Q. Judge Thornton: Can I just summarise? In your view, the COMI moved to England on 29^th March because of the way you arranged for the meeting to have an English administration?

A. Yes, my Lord.

Q. You understand from advice you got that it may have occurred, this COMI movement, when the interim Receiver was appointed, but so far as you were concerned, the critical event was that 29^th March meeting, engineered or structured for the purpose of enabling an English administration?

A. I prefer the word "structured", my Lord.

Q. I am sorry, I withdraw the word "engineered" and replace it with the word "structured".^[317]

719. "Q. The advice I had, my Lord, was that the COMI was probably already in the United Kingdom, given the factors that I have already explained, but that, to make it absolutely one hundred per cent, we should hold the meeting – and any future directors' meetings – of Glen in the United Kingdom."

Q. When did you get that advice?

(12) On 29^th March.

Q. But that was after you had moved to London.

A. No, my Lord, we did not actually move to London until 13^th April. That was when we had our first directors' meeting.

Q. I see. So the COMI did not shift to London until 13^th April?

A. Yes."^[318]

15.6.4.5 Mr Shelton's stated motive

733. "Q. … Tell his Lordship, will you please, what it was exactly that you bore in mind in

relation to Glen being suitable for administration?

A. I think, as I state in my witness statement, we were not paying bills as they were falling due. I was worried that I had very little control over the company because of the Receiver/manager position and also the injunction upon the company's assets. I was concerned that may have been brought on shore by having – onshore for tax reasons by having the Receiver effectively in charge of the company's properties. I was worried that the - about the ferocity of the litigation and the costs. I was worried that in the event that decisions were made by his Lordship which went against Mr Harjivan and against the company in relation to Group 2 proceedings, that the litigation would continue on ad infinitum, and I suppose that one of the reasons that I thought that placing the company in administration – one of the – the good that it would do would be that we would have somebody who could not be challenged by either side in this sort of point-scoring exercise that we always seemed to be undertaking between Glen and the other parties, and in particular between myself and Mr Patel, would cease. They would advise the company.

In fact, they would not advise the company, they would do what they thought was best in the interest of all creditors, including Group 2, whom I feel do deserve to be paid. They would take all the decisions about the future of the legal proceedings, and in fact they did not consult me when they dropped the recusal proceedings at all, and I was actually quite relieved that all of this would be over. But apparently it seems that it is not.

…

Judge Thornton: A moment ago I think you said that you felt that Group 2 deserved to be paid.

A. That is my personal opinion, my Lord. I do not mean in respect of the tracing claim, I mean in respect of the original judgment that your Lordship made.

Q. Paid by whom?

A. Paid – well, I do not really want to go into the compromise proceedings at this stage. Just suffice it to say that I thought that the independent administrators would be able to knock all of the litigants' heads together and come to some practical solution to avoid further litigation, my Lord.

Q. Was this an additional reason for your believing that the administration was in the best interests of the company?

A. It was, my Lord. I did not think that was improper.

Q. It is not something that you refer to here, is it?

A. It is not something I refer to there, but it was always in my mind that that would be the way forward."^[319]

"Q. I would like to ask you some questions about the witness statement that you served or filed on 20^th March 2007 in support of the application then being made by Glen for recusal of his Lordship. … one of the two prongs [of SPC's case] was the return of the properties … the position of Party 2 is to say that that compromise may be disregarded because it is either void or voidable … how can you say, as you say repeatedly in your witness statement, that you are unaware that Party 2 was making an adverse claim against Glen's properties?

A. I do not think that we were aware generally that you were making a claim, but I did not think that at that time that was going to be decided upon. So in other words, I did not realise that if – that – I did not think that his Lordship was making a decision as to the – whether the consent order was right or wrong, in other words, I did not think that was part of the fact-finding exercise as such. I thought it was merely relating or basically relating to finding out facts. In other words, not deciding upon – I mean the existence of a consent order is known, yes, that is a fact.

Judge Thornton: Do you recall a discussion in court when you applied to represent Glen and exercise rights of audience, that it would be inappropriate for you to do that because of your evidence that had been put in a witness statement that related to the compromise agreement which would form a contentious part of the proceedings in which you were seeking rights of audience?

A. I do not specifically remember, my Lord, no.

…

Q. [Following counsel showing Mr Shelton a number of orders and other documents relating to the Thakrar Litigation] So how does that square with the evidence that you gave to his Lordship a moment ago, that your view was that somehow certain of the issues raised on Party 2's claim were going to be extracted from the hearing?

A. You are quite right when you look at this, but at the time – and you can see from this file there is a huge amount of correspondence being generated by this litigation over the years. I have not examined every single piece of paper myself, I have obviously relied upon the legal advice that I was given at the time was that there was nothing which affected Glen and that we need not be represented in the proceedings.

Now, that was the advice I got off Decherts and I certainly did not have time to read all this myself. That is why I pay solicitors for. It may well be that I was wrong. If I was, I put my hands up to it."^[320]

15.6.5 Prelude to the administrators' appointment

a. 721. It is important to set out the facts relating to the steps taken that led up to the administrators' appointment. Many of these facts were only unearthed by means of the second search and seizure warrant obtained by Party 1 from the Bankruptcy Registrar in June 2007. It is clear from the documents that were obtained from Subhash using this warrant that it was a wholly justifiable step for Party 1 to have taken to have obtained these documents by applying for this warrant.

734. The relevant history starts on 1 March 2007 when I held a further procedural hearing in order to deal with an application by Glen for an adjournment of what was intended to be the final day's hearing of the trial in order to enable it to see whether it wished to mount a wholesale attack on the integrity of the trial. Prior to that hearing, Glen had, in the main, adopted a neutral stance and had only briefed counsel to argue a recusal application which I had heard in September 2006 and had ruled that I would determine that application as part of my fact-finding judgment. The trial was then, in effect, put into limbo whilst the compromise issue was prepared and then tried and determined by Judge Coulson. I then held what were intended to be the final oral submissions during which Glen's leading counsel intimated that Glen did not intend to maintain its recusal application. However, Glen then changed leading counsel and it was their new leading counsel who appeared on 1 March 2007 and informed the court that he was instructed to apply for my recusal due, amongst other factors, to the bias that it was perceived that I had shown in dealing with Glen's interests. Leading counsel also applied for a direction that funds should be released from Glen in order to enable him to examine the entire record and advise on the precise grounds that Glen wished to advance in support of this application.
735. Glen did not inform the court that it was already considering appointing administrators or that it had concerns as to its ability to pay its current debts as they fell due. These were highly material matters that should have been disclosed to the court during its application since it was applying for funding in circumstances in which it believed it could not pay its debts and for a further adjournment in order, ostensibly, to prepare a recusal application whereas, as it is now known, the period of repose granted by my acceding to the adjournment and funding applications, were used to prepare for an administration appointment by the same directors who, certainly in the case of Mr Shelton, were behind the adjournment application. Mr Shelton was in court for at least part of the application on Thursday 1 March 2007 and it was intimated that the application was made with his authority and on his instructions.
736. Mr Shelton then arranged to see Mr Cork for the first time on Friday 2, Monday 5, Tuesday 6 or Wednesday 7 March 2007. At that meeting, Mr Cork informed Mr Shelton that Smith & Williamson would need to be put in funds to the extent of £20,000 before the firm would agree to act. Furthermore, it would be necessary first to instruct solicitors and specialist counsel to advise whether an administration appointment should be made by the directors. Until the funds were received by the firm, no further step could be taken towards the administration appointment.
737. Mr Shelton then obtained Smith & Williamson's bank details from Mr Cork on 8 March 2007 and also informed Mr Cork by e-mail that "The BO is still deciding what he wants". The "BO" is clearly the beneficial owner and Mr Shelton would have been referring to Subhash in that context, since Mr Harjivan had never undertaken any decision on his own, he had always left all decision-making to Subhash and Mr Shelton stated in evidence that he did not know whether Mr Harjivan was the beneficial owner, he had always relied on Subhash for his belief that Mr Harjivan was the beneficial owner. Moreover, earlier in the trial, he accepted that Subhash certainly had a beneficial interest in Glen.
738. Subhash then started to take the necessary steps needed to put the prospective administrators in funds and to prepare the ground for their appointment. Mr Shelton stated in evidence that he had asked Mukesh to prepare the list of Glen's creditors because all the necessary information was in SKTL's offices and that firm was Glen's accountants. In truth, as Mr Shelton showed in his evidence, he had very little knowledge of what debts were owed by Glen. This was understandable in relation to debts that had pre-dated 2 August 2006 when Party 1 was appointed Receiver since he had left all management and administration to SKTL and Mukesh had undertaken the work, albeit under Subhash's ever-present and watchful eye. However, once the Receiver of rents and profits was appointed, there was no-one who was responsible for these administrative and managerial matters since SKTL were directed to cease involvement in Glen's affairs by the court and the Receiver was not a manager, merely a collector and protector of rents subject to making available to Glen all reasonable disbursements to enable Glen to carry out its day to day business activities.
739. Subhash then surfaced. On 16 March 2007, he telephoned Smith & Williamson's offices and, by chance, the telephone in the relevant department, which operates an open plan system, was picked up by Ms Milner who had been deputed to be the principal administrator if Smith & Williamson were in fact appointed as administrators. Subhash explained that he was introducing himself, as always, as acting for Mr Harjivan, albeit without referring to his status as the holder of his power of attorney. He wanted to know what he should send to Smith & Williamson and to whom he should send it. Ms Milner gave him clear instructions on these matters.
740. Almost by return, Subhash sent Ms Milner the following letter, dated 16 March 2007:

"Further to our discussion, I enclose bundles of various documents regarding Glen, Mr Harjivan and what the Solicitors have dealt with, with the Counsel's Submissions and copy emails, documents.

I hope this will help you with sufficient background and if you require anything further please let us know. I will email you Glen's 2005 accounts, property Schedule and unpaid bills and Court actions due to Shirley Jackson's non-payment.

This should be kept totally confidential on Mr M Harjivan the legal and beneficial owner's instructions to us.

I enclose Balsara & Co's email re sale of Subhash's two properties and exorbitant expenses deducted – unchallenged by Shirley Jackson again.

Mr Barry Shelton will no doubt also, confirm former written instructions on behalf of Glen International limited to proceed in this regard in due course.

Finally, arrangements will be made to put funds into your clients' account of £15,000 or £20,000 depending on what total sum is available on Monday from M. Harjivan resources he is able to send us, as loan/repayable expense.

An application need to be made urgently and Court Order to appoint your firm as Administrator is VITAL to save Glen and destruction of assets, value and claims by the Claiming parties 1 to 6 with their Solicitors, who all do not want to explain their claims – untaxed and disproportionate totally.

I will email to you separately Ashok Patel's email, where he says Glen assets of over £42m will not realise £20m or less. Please highlight that wrong.

Kindly acknowledge safe receipt. More to follow by Emails to you. Happy reading.

Kind regards to you and Stephen Cork. Thank you both.

Kind regards,

Kiran

Encls"

741. Although the letter was signed by Kiran, it was written by Subhash. Kiran has always signed e-mails sent to the court which were written by Subhash and the style is unmistakably Subhash's style. It is to be noted that this letter is somewhat desperate in tone and brings in the wholly irrelevant complaint that Party 1 sold two of his properties at an under-value and had deducted exorbitant expenses from the gross sale proceeds. The letter is tantamount to a letter of instruction and the suggested confirmatory letter from Mr Shelton was never sent. The court documents enclosed were not disclosed by Smith & Williamson but it would appear from the letter that they would have been a highly selective selection of documents from the Thakrar Litigation including the brief submission made by Mr Harjivan's counsel in support of his recusal application. No mention is made in the letter of Subhash's liability to pay SPC in excess of £5m or SPC's claims for the return of over 100 of the properties in Glen's property portfolio. Finally, it is noticeable that Subhash puts Glen's assets as being worth £42m, which is a clear indication that he regarded the Teso charges as being worthless. Subhash also sees the role of the administration as being to save Glen from the claims being made against it, there is no mention of the indebtedness which has led to Glen's current suggested cash-flow insolvency.
742. Much evidence was adduced at the hearing as to the source of the sum of £20,000, paid in two tranches of £17,000 and £3,000, that was ostensibly provided by Mr Harjivan to Smith & Williamson as the required funding needed as a prelude to that firm accepting appointment. After much evasion and prevarication, Subhash and Mukesh's evidence, supported by documentation relating to bank transfer details, was to this effect:

(1) Mr Shelton was not prepared to find any funds to place Smith & Williamson in funds. He left the task of finding this sum to Subhash and Mr Harjivan. Since Subhash is bankrupt, he could not get involved in obtaining funding directly and could not allow funds to pass through his hands.

(2) According to Mukesh's evidence, Mr Harjivan arranged for the total sum of £20,000 to be found by calling in a loan from Mukesh and his siblings of that sum. This loan had been advanced to the Thakrar family for unspecified wedding expenses for an unspecified member or members of the family. No other details of this loan were forthcoming.

(3) £3,000 of this sum was paid by Mukesh. His evidence was that he arranged for SKTL to draw a cheque payable to Smith & Williamson for this sum which Kishan paid into SKTL's branch of Barclays and it was transferred into Smith & Williamson's account. The sum in question represented a loan or advance to Mukesh of consultancy fees due to him for consultancy work he had done for clients of SKTL of an accountancy nature. Many different fees or clients were involved. No documents were produced to show who these clients were or that the sum in question was due to Mukesh from SKTL.

(4) Later in his evidence, Mukesh changed the evidence he had given about the loan that he was repaying. On his second version, the loan from Mr Harjivan had been provided in early 2006 to enable Mukesh to put his solicitors Seddons in funds. The money had arrived from people known to Mr Harjivan who either owed him money or were prepared to lend Mukesh money at Mr Harjivan's request. Mukesh did not know who the three individuals were who lent the money and, remarkably, all three, who were providing about one third each of the sum Mr Harjivan was lending, arranged for the money to be transferred by arranging a personal delivery of cash to SKTL's offices by an unknown person. Mukesh didn't meet any of the three messengers, did not give a receipt and could give no other details of the sources of these funds.

(5) £17,000 was provided by Kishan. It finally emerged that Kishan had drawn this sum from a special personal loan account he had opened for £25,000. He had opened this account at the Sidcup branch of NatWest in June 2006 without security or enquiries about his finances, which were in a parlous condition and was able to draw this sum out in March 2007. This sum was still available because he had also paid into this account £5,000 redundancy money he had obtained when SKT, who had employed him for many years, ceased to trade following Subhash's bankruptcy and he had been made redundant. Kishan was providing this money, according to his evidence, because he was jointly liable to repay Mr Harjivan his loan of £20,000.

743. Subhash did not give evidence about this provision of funds to Smith & Williamson. He did, however, send the court one of his many vituperative e-mails following the hearing of the evidence I have summarised. It is necessary to quote a passage of that e-mail so as to show the nature and content of material Subhash sought to place before the court, after any opportunity had passed to question him about it, as a means of seeking to persuade the court that Mr Harjivan was the source of this payment to Smith & Williamson of £20,000. He stated in the e-mail sent at 17.12 on 27 September 2007 to the court and all parties:

"14. Regarding the £20,000 paid to Smith & Williams (sic) has been fully and properly explained. There is no need to create a mess for the sake of trying to score points as I have said. They are acting like children and spoilt people, because they themselves see others in the light they wish to see and make false inferences, deductions and assumptions which are totally wrong and without facts. To try and confuse you by giving you the selective documentation with their interpretation put is nothing but fraudulent, false and with extremely bad motives to remove the Administrators under guise of Party 1's Application 81. I/we have categorically stated that under section 235/236 I am able to assist anybody asking for my assistance and that is what happened. The fact that we have had telephone calls, exchange of emails, providing copy documentation was on the instructions of Glen Directors Mr Barry Shelton and Mr Harjivan and Ms Avni Bhatt also as they had made their decisions and appointed the Administrators. That is what has been dealt with by Mr Barry Shelton on Parole evidence and having fully cross-examined. There were no other challenges made beforehand and it was the Glen Directors only who could make such an Appointment in the UK High Court NOT me – simple fact and the UK Laws which they do know but lie to blame in on me! Why."

Subhash also stated in an earlier passage in the lengthy e-mail:

"2. … The £20,000 paid by Mr Harjivan from his family and friends on which he has already written to you on several occasions and therefore, there is confirmation that does exist from him directly much before the event of 26 June 2007 when RHF, Solicitors for P1 came again with bad intentions and stole the documentation not for their client but for the benefit of P4. Therefore, this was an illegal activity. Arrangements are in hand to produce an Application before the Bankruptcy Court to stop this malice and to report the matters to the Police, Law Society and/or others to make sure that these abuses can never take place again in future. … ."

744. Mr Harjivan did not give evidence and did not submit a witness statement. Mr Shelton could not give any other evidence save that he said that Mr Harjivan had told him that he had borrowed the money from unspecified lenders, a significant variation from the evidence of Mukesh and Kishan.
745. I have no hesitation in rejecting Mukesh and Kishan's evidence that the money that was paid to Smith & Williamson was paid by them in repayment of a loan that Mr Harjivan had previously made to them. No such loan was established in evidence. The source of the £20,000 was Mukesh and Kishan through his loan account and both payments were made on Subhash's instructions. The money was, on analysis, advanced by the two brothers as a gift or loan to Subhash and, ultimately, the source of the funds was in consequence Subhash. This was provided by him as he is, and always has been, the beneficial owner of Glen and it was needed to enable him to launch what he clearly regarded as his last, and ultimate, poisoned pill or Exocet in order to derail the Thakrar Litigation once and for all.

15.6.6 The directors' "meetings"

746. The decision to appoint the administrators was taken, if the documents available to the court are to be believed, over three separate board meetings and the meeting on 29^th March 2007 which was not a board meeting but a meeting between two members of the board and their professional advisers. The three separate board meetings, I find never took place. I will deal with each in turn.
747. The first two "meetings" are documented in what appears to be board meeting minutes which only surfaced when Subhash's papers were searched pursuant to the June 2007 warrant. These "minutes" were found in a file of Glen papers held by Subhash in SKT's offices.
748. The first of these "minutes" reads as follows:

"MINUTES OF THE MEETING OF DIRECTORS OF THE COMPANY

HELD AT PO BOX 525

2686.601 POTELA LRS

LISBOA

PORTUGAL

ON THE 26 MARCH 2007

PRESENT MR Mahindra Harjivan (Chairman)

By Telephone

Mr B Shelton (Director)

Miss Bhatt

Mrs Marina Buckley

Notice of Notice convening the Meeting was dispensed with and the Directors confirmed that further Meeting meetings will be held in London, England.

Resignation Mrs Marina Buckley has tendered her resignation with immediate effect. Mr Barry Shelton thanked her for her work and assistance given to the Company in Jersey Office.

Mr Harjivan gave instructions for Company records to record this and deal with necessary formalities. He or Mr Barry Shelton would deal with the necessary formalities.

Administration It was discussed as an option to the Directors, who will attend London Accountants, Smith and Williamson, Insolvency Practitioners and Beachcroft, Solicitors to obtain Legal advice and act accordingly to protect the Company's assets and the maladministration of the Interim Receiver, whose lack of co-operation and not re-letting company properties, unpaid bills and Bank Loans are all causing serious concerns to the Directors and Shareholder.

Company's It was, subject to legal and other advices, considered to open an Office, branch operational

Branch to safeguard the Company's assets and property Portfolio mainly based in England & and London Wales. The address and Offices at 113 Woolwich High Street will be rented and used as Offices its address in England & Wales. The necessary formalities to be attended, when in London

Closure IT WAS RESOLVED that the future meetings will be Held at any offices and the meeting was closed.

Chairman_(M. H Harjivan)_______"

The document was signed by Mr Harjivan in what appears to be, given that his signature has been found on a number of other documents adduced in evidence, to be that of Mr Harjivan's.

749. The second minute was in similar form.

"MINUTES OF THE MEETING OF DIRECTORS OF THE COMPANY

HELD AT 100 FETTER LANE

LONDON WC1

ON THE 28 MARCH 2007

PRESENT MR Mahindra Harjivan (Chairman)

Mr B Shelton

IN Mr Mike Stubbs (Beachcroft, Solicitors)

ATTENDANCE Mrs Joanne Miller (Smith and Williamson)

APOLOGY Miss Bhatt (By Telephone)

Notice of Notice convening the Meting was dispensed with and the Directors confirmed that Meeting further meetings will be held in London, England.

Articles of A copy of the Articles and Association was produced and copy of the previous Association Directors meeting held in Lisbon – These were discussed and approved. Mr M Harjivan

as Chairman signed the Minutes.

Administration It was discussed as an option to the Directors, who will attend London Accountants, Smith and Williamson, Insolvency Practitioners and Beachcroft, Solicitors to obtain Legal advice and act accordingly to protect the Company's assets and the maladministration of the Interim Receiver, whose lack of co-operation and not re-letting company properties, unpaid bills and Bank Loans are all causing serious concerns to the Directors and Shareholder.

Directors Mrs Marina Buckley's resignation was discussed again and accepted on legal advice. Resignation She was to be thanked by Mr Barry Shelton for the Company

Roles

SK Thakrar & Co Ltd, London address to be used for Glen's Offices in England & Wales and Fordacre Associates Ltd its 100% UK Subsidiary, registered Office address also to be moved to these new Accountants Offices All 100% Shares are now owned by Glen as beneficial owners of Fordacre Associates Ltd. Mr MK and VK Thakrar are nominee Directors and Shareholders of Fordacre on behalf of Glen International limited.

Administration It was then resolved on professional and legal Advice that the Directors based in Lisbon, Order Portugal, Jerset and Kenya had no other option left butto deal with Glen opening a new

Office in London, appoint new additional directors needed to manage its London portfolio and apply to English High Court for and administration Order forthwith to appoint Smith & Williamson, a reputable and independent Insolvency Practitioners as Glen (a Liberian Company) Administrators in England & Wales to take immediate legal controls and protect all its UK assets. The Legal actions in Court of Appeal and recusal applications made for HH Judge Thornton QC, to continue with the consent Smith & Williamson on legal advice to obtain.

Mr M Harjivan and/or Mr Barry Shelton are further authorised by the Board of Directors to instruct as needed to sign all or any legal or other documents as needed. All and sundry costs incurred to be reimbursed by the Company.

Closure Future meetings to be held overseas and/or at care of SK Thakrar & Co Ltd. 113 Woolwich High Street, London, SE18 6DN, where Glen has agreed to Establish its Offices, in addition.

Chairman____(M. Harjivan)________"

750. Subhash was asked about these minutes, found as they were in his possession. As for the first, dated 26 March 2007, he stated that he had helped Mr Harjivan to draft it when he asked him to help him. Mr Harjivan signed it. He drafted it the day after the meeting because Mr Harjivan asked him to do something to record the fact that the meeting had taken place. However, Mr Shelton said that it was not acceptable and it would not be regarded as a proper minute. Mr Shelton said this early the following week when told about the minute. It was drafted because Mr Harjivan wanted to emphasise two points. Firstly, that Marina did not want to be involved with the company any more and secondly that he was, as a director, having made the phone calls from Lisbon, because he had to make various arrangements with Barry Shelton, that's what he wanted. However, Mr Shelton said, "No, I will deal with the minutes myself because I am the person taking all the decisions and I don't want anybody else to interfere."
751. Subhash was caught out by the fact that this minute records that on legal advice Glen had to open a London office. However, Subhash also confirmed in evidence that the first time that this question was raised, of an office being opened in London, was at the meeting on the 29 March 2007 in Beechcroft's offices. Subhash could not provide a coherent answer as to why the minute records this question in fact first being raised on 26 March 2007.
752. Subhash contended that the second minute was prepared the day after the Beechcroft meeting on 29 March 2007. He contended that the wrong date had been placed on the document (28 March 2007) and that he had prepared, at Mr Harjivan's request, a minute of the 29 March 2007 meeting but that Mr Shelton had overruled the use of this minute. When asked to explain how a document which clearly cannot be a record, however inadequate, of the meeting, Subhash resorted to bluster. For example, when asked how it could be a minute of the meeting, which was not a board meeting, even though it is written as if it was recording a board meeting, Subhash merely asserted:

"No, but decisions were taken by the directors of the company and therefore they, you know, regarded that as a board meeting."^[321]

753. As has been stated, Subhash attended the meeting on 29 March 2007, ostensibly as an interpreter for Mr Harjivan. Ms Milner and Mr Stubbs, in their evidence, stated that he did not speak at the meeting except in either Portuguese or Gujarati, they did not know which. It is noteworthy that Mr Harjivan needed an interpreter, as he did when giving evidence, yet he appears to have been able to attend or conduct a board meeting on 26 March 2007 in English and without interpretation. Mr Stubbs was understandably outraged at being shown the minutes of what appeared to have been a separate meeting held on 28 March 2007 at his offices with him in attendance which never took place. When asked what he thought, with hindsight, was the reason for Subhash's attendance at the meeting held on 29 March 2007, he replied:

"… With the benefit of hindsight, my own view is that Subhash was there because he is a nosy individual and wanted to know what was going on."^[322]

Mr Stubbs also accepted that it was possible that the two, when conversing in the language they were using, were having discussions rather than merely Subhash providing translations. He also stated that Subhash had always tried, as Mr Stubbs saw it, to protect himself or his family. As he put it:

"… If the judgment does find that he is the beneficial owner of shares, then its fairly understandable that he will have some interest in the residual beneficial ownership, should there be one."^[323]

754. Mr Shelton was not asked about the minutes of these two meetings but it is clear from his evidence that he knew nothing about the first meeting and nothing about being shown or told about the minutes and rejecting them.
755. In considering these minutes, I bear in mind the significant role that forged and invented minutes of SPC played in the fraud perpetrated by Subhash on SPC and on the dishonest acquisition of SPC's property portfolio. The details are set out in full in judgment no. 1. These minutes, in style and layout and in their muddled phraseology are strikingly similar to those forged SPC minutes dealing with meetings in and after 1988. I am satisfied, beyond reasonable doubt, that these two minutes are forgeries concocted by Subhash which he got Mr Harjivan to sign, probably without Mr Harjivan even reading them. It is not clear what purpose Subhash intended to put these minutes to, but they provide an insight into his thinking as to the purpose of Glen's administration. That was, in summary:

(1) Glen's assets, or rather what Subhash regarded as Glen's assets, where under great threat from the Thakrar Litigation which was drawing to a close.

(2) There seemed no way of defeating the claims of Parties 1 and 4 and Glen's assets were under great threat as a result.

(3) If Glen appointed administrators, the Thakrar Litigation would be stopped save for the recusal application which had just been started by Glen, some three weeks earlier at the directions hearing held on 1 March 2007.

(4) Glen must invent a move of offices to London as the only way of getting an administration started.

(5) The misbehaviour of Party 1 provided a good excuse for starting the administration, or as the "minute" put it:

"whose lack of co-operation and not re-letting company properties, unpaid bills and Bank Loans are all causing serious concerns to the Directors and Shareholder."

756. I now turn to the third board meeting disclosed by the evidence. This was a board meeting that it was contended had been conducted by telephone on 13 April 2007 and was the meeting at which the directors resolved to place Glen into administration. What was clearly established was that Mr Stubbs caused to be prepared a draft board meeting minute which recorded the decision to appoint the administrators. Mr Shelton's evidence was that he telephoned Mr Harjivan and Ms Bhatt in turn and carefully read out the draft prepared by Mr Stubbs and each assented to its contents. The draft is a carefully prepared three-page document which was signed by Mr Shelton. There is no written substantiation that these telephone calls took place and there was a material discrepancy between Mr Shelton's evidence just summarised and Ms Bhatt who sent an e-mail which was adduced in evidence which stated that the telephone board meeting was conducted as a three-way meeting.
757. I find that the purported telephone calls to, in succession, Mr Harjivan and then Ms Bhatt, did not take place. Had the call been made to Mr Harjivan, he would not have understood what was being read to him. Ms Bhatt was not in the habit of telephoning about Glen's affairs to anybody and these two facts reinforce my finding. What appears to have happened is that Subhash orchestrated the finalisation of the documents sent by Beachcroft and he must have merely obtained Mr Shelton's signature. Both would have proceeded on the basis that the decision had already been taken at the meeting on 29 March 2007, indeed Subhash's evidence was to that effect when he was asked about the "minute" of that meeting.
758. There is a further matter of controversy. This concerns Mr Shelton's evidence that he mentioned to Mr Barby in his capacity as a director of Teso on the telephone at some stage of the impending administration. The only record of this telephone call was in part of the minutes of 29 March 2007 which reads:

"BS was advised that if Teso or any party had a floating charge then they would need to be notified of the administration and be asked to consent to it. BS said that he would let Teso know: he had, in fact already told Teso's directors of the intention to place Glen into administration if professional advice confirmed and Teso were content with this agreeing that administration was right in the circumstances."

759. There is no written record of this conversation with "Teso's directors" and, on 25 April 2007, some 12 days after the administrators had been appointed, Mr Shelton sent the following e-mail to Mr Barby:

"Roger,

Glen by its directors has placed itself in administration.

This has horrified our opponents in litigation as it places a moratorium on the proceedings.

They are therefore trying to make the point that the administration is invalid because we did not have the consent of Teso who had a charge over Glen assets. They claim that the charge is still valid. This is extraordinary given the fact that they were instrumental in having the charges cancelled by Judge Thornton!

However, just to be on the safe side (and knowing what Thornton is like), I wonder if Teso, could confirm to Jo Milner, the Joint Administrator that they have no problem with Glen being placed in administration and formally give its consent.

Thanks

Best regards

Barry"

760. This e-mail is inaccurate in stating that Teso's charge over Glen's assets were removed. What I directed be removed was the Teso charges over properties owned by Subhash, the Teso charges over Glen's assets remained and remain in place. This considerable error made by Mr Shelton adds insight into his thinking about and remarkably partial knowledge of Glen's affairs. There was no response to this e-mail adduced in evidence. Mr Shelton stated in his witness statement that Teso consented informally to the advice that it was his intention to place Glen in administration.
761. The wording of Mr Shelton's e-mail to Mr Barby is wholly inconsistent with Mr Shelton having already notified him of Glen's directors' intention to appoint administrators. Had there been such a notification, the e-mail would have referred to that earlier conversation and indicated that it was merely confirmatory of the earlier notification. Moreover, the note of what Mr Shelton said at the meeting on 29 March 2007 suggests that Mr Shelton did not himself assert that he had notified the directors, it states that Glen had the intention of appointing administrators if they received professional advice that this course should be adopted. Until Glen's directors had actually received that advice and had decided to follow it, all that Teso had been notified of was the possibility that it might in the near future receive a formal notification.
762. In assessing the accuracy of Mr Shelton's evidence and statement to the effect that a oral notification or oral notifications were given to Teso prior to the appointment of the administrators, I take account of the fact that Mr Shelton's evidence generally about the circumstances in which the administrators were appointed and about his motivation for adopting or acquiescing in that appointment was lacking in candour and, at times, evasive. I am not therefore prepared to accept his uncorroborated evidence about this important matter, based as it is on an assertion that a conversation had previously taken place. Furthermore, the wording of the e-mail, couched in terms which suggests that it is the first intimation that Mr Shelton had given Mr Barby of the appointment, amounts to an admission by Mr Shelton that no previous notification had been given.
763. I find that no notification of the intention to appoint administrators was given to Teso or its directors. Indeed, the first that Mr Barby and the directors of Teso came to hear of the administration was by Mr Shelton's e-mail, sent eleven days after the purported appointment of the administrators. Furthermore, even if Mr Shelton had done as he stated at the meeting held on 29 March 2007 that he had done, that did not amount to a notification, in the language of Paragraph 26(1)(a) of Schedule B1, " a written notice of an intention to appoint an administrator" both because the notice was oral and not written and because it was not a notification of an intention to appoint but merely a notification that an intention to appoint might arise in the near future. Thus, there was no notification, no written notification and nothing that was said capable of amounting to notification.
764. Ms Milner, in the first Report of the Joint Administrators, stated that "I have been in touch with Mr Roger Barby, apparently a director of Teso, and Teso have waived the requirement of formal notice and consented to the administration." However, no statement in writing was produced that recorded this decision of Teso, just as there had been no response to Mr Shelton's e-mail to Mr Barby. There was no document produced in which Mr Barby's notification of Teso's waiver was recorded by him because, as I find, no such document exists. The Report does not condescend to detail of how and in what terms Ms Milner's contact with Mr Barby was effected and, in any event, this contact must have been made some days after the appointment of the joint administrators.
765. I find that whatever was said to and by Mr Barby in the course of what I find was an informal contact was insufficient to have any legal effect so as to constitute either notice of an intention to appoint or an unequivocal and informed waiver by Teso of the need to give it a notice under paragraph 26(1) of Schedule B1 or a retrospective assent to appointment by Teso so as to validate the appointment and to dispense with the need for such a notice to have been given originally.

15.7 What was Subhash's involvement in the appointment decision, if any and who funded the appointment of the administrators?

766. Subhash was heavily involved in the appointment decision both in what he did and in the influence he must have had on Mr Harjivan and Mr Shelton. Indeed, his influence on the two active directors in this matter was so pervasive that whatever motive Subhash had in promoting the appointment of administrators can and should be taken to have been the motivation of that appointment.
767. Subhash's influence and involvement may be seen from the following steps that he initiated, followed or participated in:

(1) Subhash had been the driving force behind Glen, Mr Harjivan, Thakrar Family members' and SKTL's respective participation in the Thakrar Litigation throughout and down to the decision by Glen in March 2007 to seek to pursue its recusal application. Subhash's involvement in that particular decision can be seen from the minute of the purported directors' meeting allegedly held on 28 March 2007. In that minute, which was entirely concocted by Subhash without any input from anyone else, it is recorded that:

"The Legal actions in Court of Appeal and recusal applications made for HH Judge Thornton QC, to continue with the consent Smith & Williamson on legal advice to obtain."

(2) Only Subhash knew about, or was actively involved in the Thakrar Family members' appeal, which does not involve Glen in any event, and only he felt strongly about the necessity and desirability of maintaining the recusal application. Indeed, Mr Shelton stated that he was very relieved when the administrators decided to abandon Glen's recusal application, thereby indicating that he regarded the application as hopeless or misconceived. Only, Subhash, would have been concerned that the administrators' appointment should not jeopardise the pursuit of the recusal application.

(3) Subhash prepared the documentation which was submitted to Smith & Williamson prior to their appointment and he also drafted or helped to draft Glen's answers to Smith & Williamson's COMI checklist which Ms Milner sent to Subhash and which was answered in the names of Mukesh and Mr Harjivan on 30 March.

(4) Subhash concocted without any other assistance the "minutes" of the two directors' "board meetings" that purportedly took place on 26 and 28 March 2007.

(5) Subhash attended the meeting on 29 March 2007 so as to ensure that he knew what was discussed and managed to inveigle his way into the meeting masquerading as Mr Harjivan's interpreter. Mr Stubbs finally twigged to the fact that Subhash's purpose in attending was to find out what was said because he is such a busy body.

(6) Subhash put together the documentation lodged at court to confirm the appointment of the administrators and the failure to hold any kind of board meeting to confirm the directors' decision to appoint Smith & Williamson's representatives as co-administrators on 13 April 2007 was entirely due to Subhash's oversight in failing to ensure that this took place.

(7) Subhash with Mukesh's assistance drafted the list of creditors used to found the appointment of the administrators.

(8) In two e-mails to Mr Stubbs on 10 April 2007, Subhash was seeking to use the administration for various extraneous and improper purposes:

(i) He asserted that I had removed all securities that Glen had given to Teso and that he did not understand why or how I had removed them. In fact, only the securities over his own properties had been removed and that only after Mr Shelton had stated on oath that these securities were, in effect, bogus and a sham and did not support any indebtedness owed by Glen to Teso. Subhash has, on other occasions in his e-mails to the court, spoken highly critically of Mr Shelton in giving this evidence but no evidence has ever surfaced that these charges support any loans made by Teso or are anything other than a subterfuge to deter Glen's creditors from enforcing against Glen's assets.

(ii) He asserted that the charges supported various inter-company loans. There were no inter-company loans, indeed Teso only opened a bank account very recently. These so-called loans are no more than fictitious entries in the accounts of Glen and Teso which Subhash himself drew up.

(iii) He asserted that Glen's shareholders had lent money and invested in Glen and that this indebtedness was protected by debentures in favour of Teso. There was no such indebtedness and no supporting debentures provided as security.

(iv) He asserted that Mr Harjivan was the beneficial owner of Glen.

(v) The assistance of the administrators was urged to support and take steps to obtain the reinstatement of the Teso charges and to defeat the claims made for Mr Harjivan's beneficial ownership of Glen.

(9) He was provided with a draft of Ms Milner's witness statement prepared in opposition to the paragraph 81 application and provided extensive comments on the draft and with Mukesh prepared a list of documents and dates which purportedly showed up Ms Jackson's defaults as Receiver and Trustee which were provided to Ms Milner.

(10) He took it upon himself to e-mail the court and all parties what Glen's position was in response to my e-mail to the parties seeking from them a statement of their positions. In that e-mail, he informed the court that the proceedings against Glen were stayed and would remain stayed until the Companies' Court, rather than the TCC, had given directions. Glen was stated to be leading the recusal application and the TCC was urged to suspend the Thakrar Litigation in its entirety until the Companies Court had expressed an opinion as to what should happen. This e-mail led to Mr Stubbs e-mailing Subhash and stating:

"This is really unhelpful! Please let the administrators speak for themselves. This is very sensitive stuff and we are concerned that such interventions could be very unhelpful."

To which I would add: "Quite".

(11) He provided detailed comments to Ms Milner on the response document prepared by Parties 1 and 4. These included this misstatement of the effect of the appointment of administrators:

"The appointment of administrators certainly stops all the Court proceedings against Glen as party 14. However, there are valuable contribution proceedings, there are costs claims (by Subhash) and the compromise agreement of 2002 on which a defences needs to be put in and the point should be addressed by the Directors and Administrators with their lawyers."

The stay had already been lifted in relation to the fact-finding trial by the time this e-mail was written and sent off by Subhash, the contribution proceedings had been abandoned by the Trustee some years ago and cannot now be revived and the defence to the attack on the compromise agreement had already been put in but can be seen to be as being incapable of staving off Party 2's claim to set it aside.

(12) He constantly badgered Mr Stubbs on his mobile telephone seeking information, giving advice and generally being a nuisance. Mr Stubbs, being an experienced litigator and insolvency specialist, avoided being influenced by this unwarranted interference.

(13) Subhash, with Mukesh's assistance, drafted Glen's statement of affairs.

768. Overall, Subhash appears to have first raised the possibility of administration and then asked Mr Shelton to undertake the necessary enquiries and then continued to act throughout the following period until 13 April 2007 when the administrators were appointed as he had for the past seventeen years. In other words, he continued to as the beneficial owner of Glen who was both unable and unwilling to allow anyone else to take any decisions about Glen or to manage or direct its affairs. He also displayed in that period and since, as he has consistently since trial no. 1, a remarkable state of denial as to his dishonest conduct with regard to SPC's properties, the dishonesty he has shown in the establishment of Glen and the subsequent conduct of its' affairs and in the repeated and systematic dishonesty he has displayed in seeking to thwart the legitimate enforcement and tracing actions of the many parties who have been wronged by his actions. These parties include, but are certainly not limited to, the many family members ensnared in his deceitful net and the many professionals who have acted for him and his interests and for the interests of each claiming party.
769. I am bound to view Subhash's conduct and motives relating to the appointment of administrators of the company he dishonestly set up and subsequently managed in the light of his dishonest conduct throughout the 24 years since his first act of dishonesty in procuring the first of the properties that he and Neil plundered from William's Estate. In particular, I must consider his actions in the light of his conduct summarised in paragraph 755 above. In the light of all the evidence I have summarised, which is dealt with extensively throughout this judgment, I am satisfied that he first put Mr Shelton up to seeing whether it would be possible to put Glen into administration, he pushed the decision forward and he took all the steps that I have outlined so as to both procure their appointment and so as to attempt to ensure that their actions led to the fatal interruption of the claiming parties' cases against Glen and his Estate. Mr Shelton appears to have taken no step himself save for helping to prepare his witness statement and attending court for cross-examination. Mr Shelton was prepared to agree to the administrators' appointment and it was clear that he adopted Subhash's motives for this appointment. Moreover, it was Subhash with Mukesh's assistance who put together the information needed to enable the case to be run that Glen was insolvent, a case put forward, as I find, to mask the fact that there were no good reasons for seeking administration and that administration was being sought first and foremost as an attempted and last ditch means of stopping the Thakrar Litigation and forcing an unwanted and unwarranted settlement on the claiming parties.

15.8 Did the directors ever formally appoint the administrators?

770. The directors contended that the administrators were appointed pursuant to the decision taken at a board meeting held on 13 April 2007 at which each of the three directors agreed to the contents of a detailed draft minute of the board meeting prepared for them by Mr Stubbs of Beachcroft. This minute contains a resolution that Glen be placed in administration and was signed by Mr Shelton. The minute records the meeting as having been concluded at 1.28 pm on that day.
771. As I have already found, no meeting of that kind took place. What happened appears to have been that Mr Shelton received the draft minutes and, probably in the presence of Subhash at SKTL's offices, signed the minute. Subhash clearly considered that the decision to appoint administrators had been taken by the two directors present at that meeting, being Mr Harjivan and Mr Shelton. Mr Shelton was still somewhat confused about precisely what had been agreed and by whom and on what occasion when giving evidence on two separate days of the hearing. This confusion was undoubtedly the result of his trying to steer a very fine line between giving accurate answers to the questions he was asked but seeing the need to hide the fact that Subhash had driven the exercise of placing Glen into administration from the outset. Mr Harjivan, who clearly cannot speak anything other than pigeon English, could not have understood anything of the minute had it been read out to him over the telephone and would not have learnt much from the meeting held on 29 March 2007. Subhash could not have spent much time explaining what was happening, it is likely that he was devoting much of his time to coaching Mr Harjivan and to following what was being said for his own purposes. Ms Bhatt, had she been spoken to, would not have followed much of the contents of the minute but, in truth, she was not even spoken to on that day.
772. Thus, no board meeting took place. However, at the very least, Mr Shelton in the presence of the beneficial owner of Glen, approved and signed a document which appointed Mr Cork and Ms Milner administrators. It is a matter of law as to whether the decision taken solely by Mr Shelton in the presence of the beneficial owner of the company to appoint administrators, a decision taken against the background leading up to that decision that I have found to have occurred, complies with the statutory provision contained in paragraph 22 of Schedule B1 that "a company may appoint an administrator" or "the directors of a company may appoint an administrator". It seems unlikely that the signature of Mr Shelton on a document describing itself as the minutes of a meeting and which records the factors that led to the directors named in the document to reach the decisions taken constitutes the decision of the directors if the meeting described never took place.
773. However, since the conclusion as to whether or not the directors took an appointment decision raises issues of law in the light of my findings, I will decide this question in a further hearing concerned with the legal consequences that must flow from the facts found in this judgment, but only if it turns out to be necessary to decide this question.

15.9 May Parties 1 and 4 now allege that there was a procedural irregularity in the appointment process?

774. At a very late stage, namely after the closing of the final day of the trial and only two working days before judgment was due to be handed down, Parties 1 and 4 gave notice of their wish to raise or revive the question of whether Glen's directors failed to achieve a valid appointment of the administrators due to a failure to give a paragraph 26 written notice of their intentions to Teso as a holder of a qualifying floating charge.
775. The administrators objected to this point being raised at such a late stage because it was a fact sensitive point and involved Parties 1 and 4 approbating and reprobating since the point, it was contended, had been raised by those parties when first launching their paragraph 81 application and then abandoned at the outset of the hearing.
776. I find that the response to these points by Parties 1 and 4 to be compelling. In summary, they contended:

(1) Until the new evidence was obtained, it was not apparent a paragraph 81 notice had not been given. This was because the evidence previously adduced, which asserted that this notice had been given or waived, could only clearly be seen to be false once the new evidence was available.

(2) The issue did not take the administrators by surprise and all possible evidence relating to this issue was now before the court.

(3) The issue goes to the jurisdiction of the inherent powers of the directors to appoint administrators. It also goes to the jurisdiction of the court to engage, validate and supervise the process of administration by out of court appointed administrators, an engagement required by the statutory framework that Schedule B1 gives rise to.

777. I therefore allow this issue to be raised.
778. 10 Were any necessary procedural requirements for a valid appointment of administrators complied with and what is the effect of any non-compliance?
779. This issue raises the question as to whether:

(1) It was necessary in this case for the directors to comply with the notice requirements of paragraph 26 of schedule B1;

(2) If so, were the requirements complied with:

(3) If not, were the requirements mandatory or directory;

(4) If directory, were the requirement capable of being waived by Teso or by the court;

(5) If so, was there a waiver or should the requirements be waived by the court.

780. It is first necessary to consider who must be given a paragraph 26 notice. That notice must be given to a qualifying chargeholder, being the holder of a floating charge. Teso is such a chargeholder by virtue of the floating charge imposed over Glen's assets dated 8 November 1996. This charge has never been lifted although I have found in this judgment that it is invalid. No declaration to that effect has yet been made and the charge is, in consequence, in place and it remains binding on Glen and enforceable by Teso until it is removed or ordered to be removed by an order or declaration of the court. This is particularly so since Glen is a Liberian company whose COMI and place of business have only recently clearly been established to be within the jurisdiction of the English courts.
781. There are two limbs to the statutory requirement of notice. Firstly, a notice in writing must be given of the directors' intention to appoint administrators, paragraph 26(1)(a), and secondly, the notice must be in the prescribed form, paragraph 26(3)(b). That form is Form 2.9B. It is important to consider both the reason for this notice and the procedure that follows its service. It is clear that the intention is to give a holder of a floating charge an opportunity, before out of court administrators are appointed, of exercising its right to appoint an administrative Receiver under its floating charge. Since directors can only appoint administrators if the company is unable to pay its debts, the company is likely to be in a condition in which the entitlement to appoint administrative Receivers has crystallised. If the holder of the floating charge is unable to appoint its own administrative Receivers prior to the appointment of administrators, its rights under its charge will be, or could be, significantly compromised. In consequence, paragraph 26 is aimed at giving those holders of the floating charge a prior but limited opportunity to exercise their rights before the directors can appoint out of court administrators. If an administrative Receiver is appointed in that limited window of time by the holder of the floating charge, the directors may no longer exercise their own power of appointment. If no such appointment is made, the directors may act and, thereafter, the holder of the floating charge and the indebtedness charged will be subject to the regime imposed by Schedule B1.
782. The notice requirements are, therefore, of some consequence and it is to be expected that the statutory regime which gives rise to them is likely to be both strict and incapable of being waived. Such is common in such situations, for example the notice regime imposed by the Landlord and Tenant Acts relating to the statutory entitlement to renew commercial leases or to prevent that entitlement from being exercised. It is well-known that these notice requirements must be strictly observed and cannot be waived and, if not complied with, the court cannot extend time or grant relief from non-compliance.
783. In this case, no notice was given. The administrators appear to contend that the question for consideration is whether the wrong form was served since the directors are required to use Form 2.10 when lodging the requisite documents at court where there is no qualifying chargeholder and that was done. However, in my judgment the correct question is whether the failure to give notice to Teso, as I have found occurred, precludes the directors from appointing administrators at all.
784. It is clear to me that the requirements of paragraph 26 are mandatory. The purpose of these requirements and the lack of any statutory mechanism to grant relief against non-compliance point inexorably to the conclusion that directors cannot appoint administrators using the out of court procedure unless and until they have complied with paragraph 26 where there is in existence a qualifying chargeholder. These requirements are not mere formalities, they are in place to ensure that the overriding and pre-existing rights of floating chargeholders are not overridden. A floating charge is an essential and much-used method of commercial financing and unless the rights created by these charges are protected from the use by directors of the power to make out of court appointments of administrators, the commercial confidence that allows for the provision of credit to commercial undertakings would be weakened.
785. I therefore reach the same conclusion as did Hart J in Re G-Tech Construction Ltd^[324] who concluded that the related provision requiring the correct form to be filed at court was not complied with and cannot be waived. If the requirement to lodge the correct form at the court cannot be waived, it must follow with even more force that the requirement to serve a notice in writing in the first place also cannot be waived.
786. The administrators did not seriously challenge the conclusions I have reached. They sought to contend that Teso is not, or should not be treated, as a qualifying chargeholder. They point to paragraphs 14 – 21 of Schedule B1 which sets out the statutory scheme for the appointment by qualifying chargeholders of administrators which only allows for such an appointment by chargeholders where the floating charge is enforceable. They contend that Teso's charge is not enforceable in reliance on the evidence of Mr Shelton and, no doubt had this issue been argued out following the handing down of this judgment, on my findings. They also contend that these provisions require the reading into paragraph 26 a limitation or qualification that has the effect of interpreting the phrase "any person who is or may be entitled to appoint an administrative Receiver of the company" as meaning "a qualifying chargeholder" and then qualifying that meaning as "a qualifying chargeholder except one whose floating charge is not enforceable". It also requires a decision as to whether, despite all its limitations and shortcomings, this charge was, on 13 April 2007, one that falls within the description in paragraph 16 of being "not enforceable".
787. The more natural interpretation of paragraph 16 would be only to exclude as being "not enforceable" those charges which have been declared to be unenforceable in legal proceedings or where there is a clearly established receipt which shows that the entire indebtedness charged has been discharged. Otherwise, the decision as to whether a charge is or is not enforceable is to be left to the subjective judgment of the directors and not on documentation which can be readily verified and obtained.
788. 11 Were the necessary prerequisites for appointment present, particularly was Glen unable to pay its debts at the time of appointment?

15.11.1 Introduction

789. Essential prerequisites for this appointment were:

(1) Glen was unable or was likely to become unable to pay its debts;

(2) Glen was in need of financial rescue;

(3) The purpose of the administration, namely the financial rescue of Glen, was likely to be achieved;

(4) Glen's centre of main interests ("COMI") was within the jurisdiction. The notice of appointment stated that Glen's COMI was at 113 Woolwich High Street, namely the offices of SKTL.

790. In this case, the prerequisite for appointment that is relied on is the alleged indebtedness of Glen at the time of appointment, being a total sum of £1,079,523.03 set out in the schedule lodged with the notice of appointment which had been prepared by Mukesh. This indebtedness was said to be incapable of being met by Glen out of its income and it was not possible for Glen to raise any of its capital to meet this debt since it was charged, subject to injunctions and the iron hand of the interim Receiver and to the inability of Glen's management to take any action which would enable the indebtedness to be discharged, largely due to the intransigence of the Receiver and of the claiming parties in the Thakrar Litigation. That litigation was proving to be unsettle able and had been, and would continue to be such a drain on Glen's resources that it was unable to manage its business in such a way as to be able to trade profitably and meet its debts.
791. It is clear that Glen's COMI at the time of its appointment was, and had been for many years, England and Wales. This had nothing to do with the appointment of a Receiver or the decision by Subhash and Mr Shelton to move Glen's offices to London or to hold meetings on either 29 March 2007 or 13 April 2007 in Woolwich but to the fact that the company had been managed and had run the totality of its business in the Woolwich offices of SKT whilst leaving an outpost in Jersey devoted, in effect, to the filing of documents provided by Subhash from Woolwich and answering his repeated overbearing letters demanding secretarial action by Mr Shelton. This was coupled with the fact that the entirety of Glen's business involved managing and investing in properties located in England.

15.11.2 Glen's indebtedness

792. As the facts of Glen's situation were presented to them, it is understandable, and indeed obviously correct for the directors' advisers to advise the directors in the meeting held on 29 March 2007 and thereafter that administration was an appropriate course of action to take. On the basis of the information given to them, it appeared that Glen was unable to meet its debts. However there are four features of this alleged indebtedness which throw this advice into doubt.

15.11.2.1 The alleged malign influence of the Receiver

793. I have already highlighted the actual or feigned misunderstanding that Mr Shelton had about the role of the interim Receiver following her appointment on 2 August 2006. Mrs Jackson's sole function was to collect in the rents and account for them to the court. She had no role in managing the properties or of the business as a whole. Her appointment did, in fact, throw out the de facto, and probably unlawful, management structure that had existed previously. Since all the properties and the income and investments of Glen were managed by Subhash and Mukesh in Woolwich, Mr Shelton had no involvement in the day to day affairs of Glen. When the freezing injunctions were imposed, they did not appear to be given effect to by Subhash and Mukesh in relation to the HSBC account that SKT held in Woolwich into which all rents and other income was paid and out of which the day to day running expenses were met. This arrangement continued until the Receiver was appointed, indeed the discovery of this arrangement when Mr Shelton was giving evidence and the discovery of clear breaches of the injunction that were occurring through Mukesh's methods of operation, led to the appointment of Mrs Jackson as interim Receiver in the first place.
794. Mrs Jackson, of necessity, did pay out of her receipts essential day to day expenses, such as Council Tax, insurance and other such outgoings. Some of these were, indeed, paid out by the managing agents before accounting to her for the net rents recovered and she then paid out further expenses. However, Mrs Jackson could not pay out anything which was not drawn to her attention and Mukesh and Mr Shelton were either inefficient or deliberately obstructive in drawing to her attention some of the indebtedness now relied on.
795. A further complaint raised by Mr Shelton was that the income stream of Glen was significantly depleted after Mrs Jackson's appointment. In fact, as the evidence demonstrated, the income stream increased following her appointment due to the fact that Mukesh had not managed the properties very well and had not been ensuring that properties were promptly relet as they fell vacant.
796. All in all, Mr Shelton painted a wholly inaccurate picture to Glen's advisers in relation to the role of Mrs Jackson. As is clear from his evidence already set out, he never made any attempt to contact her, he never notified her of his concerns, if he actually had any, that Glen was unable to meet its debts and he wrongly painted her position as being one in which she had a conflict of interests in relation to her duties to Subhash's estate and to Glen. She was only a Receiver, not a manager; she was only intended to remain in post for a few weeks pending the outcome of the Thakrar Litigation and had been appointed in an emergency to stem the significant and unlawful braches of the freezing injunctions imposed on Glen's assets that were occurring due to Subhash and Mukesh's misuse of the HSBC account; she never interfered with the running of Glen's business and only paid out those sums which she was asked to pay which she considered were genuine and bona fide day to day commercial expenses of Glen and she appears to have faithfully complied with the terms of her appointment and of the freezing injunctions she was appointed to enforce.
797. Mr Shelton not only misstated Mrs Jackson's role but he appears to have deliberately failed to draw to the court's attention, under the terms of both the freezing orders and the order appointing the interim Receiver, the perceived difficulties that these court orders were providing. That suggests, given that he was able to obtain legal advice, that his difficulties were either exaggerated or non-existent. However, his omission is more serious still. During the course of trial no. 3, the court directed that a total of £200,000 should be paid to Glen and Mr Harjivan from its own resources to enable it to obtain legal advice and representation. The most significant order was that £100,000 should be made available to pay for such legal assistance to prepare for and present Glen's recusal application, an order made on 1 March 2007 only days before Glen's apparent cash flow difficulties led to the appointment of the Receivers. Mr Shelton failed to draw to the attention of the court the cash flow difficulties he now complains of even though, if they existed, they required the expenditure of the funds that, following his application to the court, were redirected to Glen's legal advisers. His lack of candour, obviously induced by Subhash, is both breathtaking and very revealing as to the alleged problems of Glen in meeting its outgoings as they fell due.

15.11.2.2 Teso charges

798. It is clear, and Mr Shelton has acknowledged on various occasions when giving evidence, that the Teso charges are shams and do not support any indebtedness to Teso owed by Glen and these charges have not been assigned to, or appropriated to, any indebtedness owed to Mr Harjivan or other third parties. They have not been removed however, because of Subhash's continuing insistence that they are valid and his strident but ill-founded complaints that the Teso charges over his properties were vacated after the court had received evidence which proved that these charges were ill-founded. These matters were not drawn to the attention of Glen's advisers and, indeed, they were left with the impression that I had directed the removal of the charges that were lifted improperly and without a proper trial or consideration of the evidence.
799. Ms Milner accepted in evidence that Glen had managed to arrange a loan facility of £20 million in early 2007 so that if the Thakrar Litigation was compromised, it would have available immediately the means of paying out all those who were to receive payment as a result. None of this facility had been drawn down and, indeed, the facility was only available in principle but Mr Shelton appears to have been able to arrange it without difficulty. This was possible because he was able to represent Glen as a company with uncharged assets worth at least £34 million. Ms Milner also accepted that the principal indebtedness to the Bank of Scotland, in a sum of about £300,000, was charged and fully protected against a limited number of Glen's properties. Her contention was that Glen remained in need of administration because its debts were not being serviced. She painted a picture of a company whose loan had not been drawn down who was in the iron grip of both injunctions and freezing orders and had bailiffs knocking at the door. As she put it: "it has a future income, but it is not there".
800. However, the future income had not materialised into current cash flow sufficient to meet Glen's genuine indebtedness because of the failure by Mr Shelton to take the necessary management steps in time so as to realise the necessary income to meet current indebtedness. The gloomy picture painted by Ms Milner was one she had been provided with by Mr Shelton and by the interfering protestations of Subhash and the inaccurate portrayal of indebtedness of Mukesh.

15.11.2.3 Glen's debts

801. The actual indebtedness displayed by Mukesh's schedule prepared at the end of March 2007 was less than £100,000. It has to be remembered that Mukesh's instructions from Subhash were to put everything into the schedule. Mr Shelton stated in evidence of this schedule that:

"We put everything in that there could possibly be said to be against."^[325]

802. In fact, much of the schedule was not to be regarded as being in that category at all. The principal items that should properly be omitted from the schedule were as follows.
803. Bank of Scotland - £305,000. The Bank of Scotland had inherited a loan account in favour of Glen from the Bank of Wales. This had been created a few years earlier at Subhash's request when he had enquired about a facility from that Bank and was offered huge facilities on the basis of his being the beneficial owner of Glen which was worth many millions of pounds and was unencumbered with debt. The debt was being regularly serviced by Glen on a monthly basis out of income and was charged against a limited number of properties. The loan was called in at the end of October 2006 because these monthly payments were late in being paid. It is clear from the evidence that these difficulties in late payment were occasioned by a failure by Mr Shelton, or through him of Mukesh and Subhash, to inform the Receiver and her solicitor timeously, in the period leading up to the demand calling in the loan, of the need to make these payments. However, the evidence showed that the Bank of Scotland would have been, and may still be, prepared to return to the previous arrangement if its instalment arrears and interest were paid off and the monthly payments were resumed. In any event, the evidence also showed that it was and remains prepared to be repaid by allowing the sale of its secured properties and to await payment of the capital sum, outstanding interest and costs until this security has been realised.
804. Brokers Fees at 1% of prospective loan of £20 million - £200,000. It became clear from Mr Shelton's evidence that Glen had no contractual obligation to pay this commission and that, in any case, had the commission become payable, it would not have been Glen but the Thakrar Litigation parties participating in the compromise discussions who would have been collectively liable since the loan was discussed by Mr Shelton on their behalf generally.
805. Fees associated with the compromise negotiations £346,000. The schedule contains reference to alleged outstanding fees and costs associated with the defending parties' expenses in relation to the compromise negotiations and possible compromise agreement which never materialised and which led to Judge Coulson's finding that compromise had never been agreed. It is clear that all, or the great majority of these sums are ones for which Glen has no contractual liability to pay or are not yet payable or are grossly inflated. At all events, they do not properly rank as indebtedness currently needing to be paid out of income as at 13 April 2007.
806. SKTL's outstanding fees - £120,000. There was and remains no evidence of Glen's contractual indebtedness to pay this sum, of the invoiced services to which it applies backed by timesheets or of outstanding unmet demands for payment. SKTL is Mukesh and other family members by another name and was set up to acquire SKT's business on Subhash's bankruptcy. This was certainly not an immediate indebtedness.
807. Outstanding directors fees - £28,000. This represents a claim by Mr Harjivan for outstanding directors' fees. This claim has not been documented and appeared to represent what Subhash considered Mr Harjivan should be paid. In any case, in view of his dishonest claim to the ownership of Glen's shares and the lack of any services provided by him to Glen, this claim would appear to be wholly irrecoverable.
808. Claims by two companies owned by Thakrar Family members - £18,000. These claims had been scrutinised by the Receiver who considered them to be unjustified or, at best, grossly inflated. The companies were small building companies controlled by Mukesh and other Thakrar siblings and they appeared to be a vehicle for these members to siphon money out of Glen as opposed to undertaking maintenance at reasonable rates for Glen on its property portfolio.
809. Halifax mortgage - £18,000. This sum had already been discharged and the mortgage cleared.

15.11.2.4 Alleged inability to pay

810. It was very evident from the evidence that the only example of a debt that Glen appeared unable to pay that Mr Shelton was aware of was the Bank of Scotland loan and that was only incapable of being paid because the Bank had called in the loan. This was called in because the monthly direct debit arranged on Glen's RBS bank account in Jersey which had been frozen by the injunction. It was Mr Shelton's responsibility to either make arrangements for this account to be permitted to make payments towards this direct debit or to arrange for the payments to be made by the Receiver by instructing her to make these payments. In fact, the Receiver through her solicitor was notified but only in October and the payments for three months between August and October were paid by the Receiver but, a short time before the payment was made, the loan was called in.
811. Mr Shelton made no attempt to discuss the suggested cash flow difficulties or suggested unpaid bills with the Receiver and did not even mention to her that he had these concerns at the time he was arranging to see Mr Cork in early March 2007 to discuss the possible need for Glen to appoint directors. He also made no attempt to arrange for Scott & Co to apply to the court for directions in relation to the injunctions or the Receiver so as to enable Glen to obtain funds held up by these processes, if they were held up in this way, to meet its day to day business expenditure and he does not appear to have sat down with Mukesh and ascertain what liabilities Glen had or to ensure that all bills should be sent to him so that he could arrange for their payment by the Receiver. He was, after all, the manager of Glen's business as well as its director. In truth, these steps were not taken because Subhash had not, and would not have, authorised them and Mr Shelton and Mukesh remained under Subhash's guiding hand.

15.11.3 Inability to pay debts

812. The directors relied on this provision of the Insolvency Act 1986 which defined the phrase "inability to pay debts" as showing that Glen was unable to pay its debts on 13 April 2007:

"123. (a) if a creditor (by assignment or otherwise) to whom the company is indebted in a sum exceeding £750 then due has served on the company … a written demand (in the prescribed form) requiring the company to pay the sum so due and the company has for 3 weeks thereafter neglected to pay the sum or to secure or to compound for it to the reasonable satisfaction of the creditor; or

…

(e) if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due."

813. I must, as I see it, consider the position of Glen as at the 13 April 2007, the date the directors contend they considered whether the statutory test was satisfied. On that day, the Bank of Scotland had served a demand for £282,434.56, it had been served on 30 October 2006 on Glen at SKTL's Woolwich offices and Mukesh and Subhash had not brought it to the attention of the Receiver, or even possibly Mr Shelton until March 2007. It was therefore unpaid but it seemed clear from Mr Shelton's evidence that it would have been possible to compound this debt by arranging for a sale of sufficient of the charged properties, numbering 9 in all, charged with the loan account and allowing the interests accruing whilst the sales were arranged to be added to the sum to be paid out of the proceeds of sale. Thus, Glen could have proceeded on the basis that it had compounded, or was readily able to, compound to the reasonable satisfaction of the Bank of Scotland its overall indebtedness to that Bank. The debts that could be said to have fallen due on or before 13 April 2007 that had not been paid did not total more than £50,000 - £60,000 at most and were probably much smaller is size. These could have been met out of income.
814. It is noteworthy that Ms Milner in her evidence, and Mr Arden QC in his written submissions, rely almost exclusively on indebtedness which was not referred to in Mukesh's schedule or considered at the meeting on 29 March 2007. This indebtedness includes HM Revenue & Customs' assessments in the sum of £346,000 which were first raised in a letter dated 24 April 2007; a judgment debt of £92,403.52 which was of long standing and was ignored by Mukesh's schedule and, so it would appear, is adequately charged and the creditor is not currently pressing for payment; interim costs orders in the Thakrar Litigation totalling £77,000 which, again Mukesh and Subhash's schedule ignores and which could not found an administration order since the relevant claiming parties are not pressing for immediate payment.
815. I conclude that the statutory threshold was not met on 13 April 2007 in that:

(1.) Apart from the Bank of Scotland indebtedness, Glen's overall indebtedness as at 13 April 2007 did not exceed about £60,000 in the sense of debts which had fallen due for payment;

(2.) Glen could have compounded with the Bank of Scotland for its indebtedness and the court would have sanctioned the sale of charged properties sufficient to meet this compounded sum;

(3.) Glen's income was sufficient to meet its current indebtedness;

(4.) There was no difficulty in arranging for genuine day to day expenditure to be met by the Receiver if she was kept fully and speedily informed of bills as they fell due and if Mr Shelton had worked directly with her instead of ignoring her; and

(5.) Mr Shelton was sufficiently unconcerned at Glen's ability to meet its day to day indebtedness that he did not know what it was until he saw Mukesh's schedule at or soon before the meeting on 29 March 2007 and the indebtedness only appeared unmanageable because Subhash had instructed Mukesh to put into the schedule everything that could possibly be said to be against.

816. It is interesting to note that, due to the Thakrar Family state of denial about their liability to claiming parties in the Thakrar Litigation and also about their established liability in other litigation where tenants have succeeded in enfranchising their interest, the "throw everything in" schedule prepared by Mukesh with Subhash's assistance and pursuant to his instructions, omits reference to existing costs orders in favour of claiming parties totalling £77,000. For similar reasons, it omits reference to Glen's longstanding liability to meet a judgment debt in favour of Mr Lynch for £92,403.52 arising out of the enfranchisement proceedings in which Subhash and Mr Harjivan acted so dishonestly. Again due to Subhash's state of denial about Glen's substantial tax liability to HM Revenue & Customs, there is no reference to impending assessments totalling £346,000 or more. This blind spot stems from Subhash's pride and vanity at having arranged Glen's tax affairs, as he believes, so that it has no or very little tax liability. However, Subhash has consistently ignored the fact that his dealings with HMRC have always been based on Subhash's deceit that has led HMRS to believe erroneously that Glen is, and always has, been an off-shore company with a Jersey COMI which is wholly owned by overseas residents.
817. 12 Was Party 1 a "Receiver" as defined by paragraph 41(1) of Schedule B1?
818. This issue arises because both the administrators and Mr Shelton considered that the administrators could require Party 1 to vacate her office by virtue of Paragraph 41(2) of schedule B1 which provides that:

"(2) Where a company is in administration, any receiver of part of the company's property shall vacate office if the administrator requires him to."

Mrs Jackson was appointed by the court pursuant to section 37 of the Supreme Court Act 1981 to preserve property claimed by other parties and as a preservative measure to support those parties' claims in legal proceedings. Thus, the interim Receiver is not a receiver of "part of the company's property" but is a receiver of monies against which there are valid and bona fide claims to hold to the court's order to abide the conclusion of, and decision in the proceedings. Pending the resolution of those disputes, Glen is not entitled to treat that property as its own albeit that it may use the monies for legitimate running expenditure. Otherwise, it must apply to the court for permission to use monies held by the receiver who is a court officer and who must account to the court for the monies held.

819. In my view an interim receiver appointed by the court as an adjunct to legal proceedings is not a receiver to which paragraph 41(2) applies at all. Of course, the legal proceedings out of which the receiver and any injunctions or freezing orders flow are subject to a moratorium which covers the institution or continuance of any legal process including legal proceedings, execution, distress and diligence except with the consent of the administrator or the permission of the court. Thus, the interim receiver who is already in post who has been appointed by the court may not act without obtaining the permission of the court or of the administrators but the administrators cannot require that receiver to vacate office, they must apply to the court for an order to that effect if that is what is sought and the court would then need to exercise its discretion as to what should be done with the order appointing the interim receiver in the first place.
820. 13 By applying the appropriate three-stage test, were the appointers of the administrators influenced by an improper motive?

15.13.1 The Principles

821. It is a precondition of the discretionary jurisdiction that the Court should be satisfied that there was an "improper motive" on the part of the Directors in making the appointment. The time at which motive must be judged is at the time of the appointment. The onus of establishing improper motive is with the persons making the application under paragraph 81, namely Parties 1 and 4.
822. Schedule B1 gives no guidance as to what is meant by improper motive or the conditions under which it might be established. Nor is any guidance to be found in the material published by the relevant government departments and agencies which sponsored the amendments to the 1986 Act made by the Enterprise Act 2002.
823. In determining what approach the court should adopt to the question of improper motive, it can and should adopt the approach applicable to any challenge to the exercise by directors of the powers conferred on them generally. This is because no power vested in directors, including the power to appoint administrators, may be validly exercised for an improper motive. The approach to this general question was authoritatively set out in the opinion of the Board delivered by Lord Wilberforce in Howard Smith Ltd v Ampol Petroleum Ltd^[326].
824. The approach that a court should adopt may be set as follows:

(1) The court must first consider the nature of the power whose exercise is in question. In this case, the relevant power is the statutory power to appoint administrators. The court must determine the limits within which it may be exercised.

(2) Next, the Court must determine the substantial purpose for which the power was actually exercised. In determining this issue, the state of mind of the persons exercising the power is all-important. That state of mind is a question of fact, to be determined in the ordinary way, directly from evidence from the persons whose decision-making is challenged and indirectly by inference from the established facts.

(3) Finally, having identified the substantial purpose which motivated the exercise of the power, the court must determine whether that exercise was proper or not. In doing so, it will give credit to the bona fide opinion of the directors, assuming that the exercise of the power was bona fide. The court must, in undertaking this exercise, also recognise that the line between a proper and an improper exercise of a power is a "broad line".

825. It is important to note that Lord Wilberforce identified the task of the Court at stage two to be the identification of the "substantial purpose" or the "primary purpose" for which the power was actually exercised.^[327] The use of the terms "substantial" and "primary" is important, because it caters for mixed motive cases. It is not sufficient to establish any improper purpose or motive; that purpose or motive must have been the substantial or primary purpose or motivation behind the exercise of the power in question.
826. The Howard Smith case does not deal with the significance of professional advice. What is the position if directors act on advice to the effect that administration is appropriate? There is a useful discussion of this point, in the context of paragraph 81 challenges, in Kerr and Hunter on Receivers and Administrators,^[328] in which the authors suggest in a passage which I gratefully adopt that, even if the court concludes that the advice was wrong, that would not be sufficient to establish improper motive on the part of the directors who relied on that advice.
827. Moreover, as the authors also point out, the intended administrator is required to state, in the forms accompanying the notice of appointment, that he believes that:

"in his opinion the purpose of administration is reasonably likely to be achieved."^[329]

828. This is an essential part of the process, and an important safeguard, which requires the intended administrator to have formed a professional judgment as to the likelihood of the administration achieving the statutory purposes at which the administration process is directed. As with other professional advice, the fact that the intended administrator has formed and expressed that view is of critical importance when assessing the motives of the directors making the appointment.
829. The purpose of administration is defined in paragraph 3(1), as follows:

(1) Rescuing the company as a going concern; or

(2) Achieving a better result for the company's creditors as a whole than would be likely if the company were wound up (without first being in administration), or

(3) Realising property in order to make a distribution to one or more secured or preferential creditors.

830. Provided that the substantial or primary motive of the directors, in making the appointment, was to seek to achieve one or more of those purposes in relation to the company, it is clear that the motive would be proper. In this regard, and in all cases, the directors will have the benefit of and be able to rely upon the fact that the intended administrator has stated that he considers that the administration purpose is reasonably likely to be achieved in relation to the company.
831. However, it is possible to imagine cases where the substantial or primary motive is improper, notwithstanding the existence of the statement. In such a case, the administration might continue, but only in circumstances where the Court considered that it was in the best interests of the company and its creditors, and made an order achieving this result in the exercise of its discretion.^[330]
832. I conclude therefore that, in applying Lord Wilberforce's three-stage approach, I must decide whether the primary or substantial motive was improper notwithstanding that the decision to appoint was taken on professional advice and the appointees made a statutory declaration that the intended purpose of rescuing Glen as a going concern, which was the purpose for appointing administrators for Glen, was likely to be achieved.

15.13.2 The Motive of the Directors of Glen in appointing

833. I must first decide who, for the purpose of this application and of the appointment in question, are the directors. I have already concluded that there was no directors' meeting held on 13 April 2007. I must assume, for the purposes of this application, that the appointment was valid since, otherwise, paragraph 81 cannot be engaged. Thus, strictly speaking, the appointment must be taken to have been that of Mr Shelton. However, it is clear that Mr Harjivan can be taken to have adopted the views of Mr Shelton since he can speak no English and was obviously fully in agreement as to anything that was motivating Mr Shelton. Ms Bhatt does not appear to have had, at the time of the appointment or previously, sufficient involvement in the affairs of Glen to have been capable of deciding in any other way than merely to adopt whatever Mr Shelton advised and whatever was motivating his decision.
834. However, as I have already found, the driving force behind the appointment was Subhash. He was the beneficial owner of Glen and its assets, he had always been the controlling mind and sole shadow director of Glen and it was he who had been masterminding Glen, Mr Harjivan and his siblings' involvement in the Thakrar Litigation. Moreover, Mr Shelton had always, as I have also found, unhesitatingly and without question allowed Subhash to take all decisions. There is no evidence to suggest that this particular appointment decision was taken by Mr Shelton with any greater role in its formulation or motivation or with any less influence from Subhash in any other way than all other decisions involving Glen that he had been involved in since his appointment as a director.
835. It follows that I must determine what motivated Subhash in urging Glen's directors, led by Mr Shelton, to appoint administrators on 13 April 2007 and in taking such an active part in securing that appointment.
836. It is clear from my findings that the motivation of Subhash was as follows:

(1) Glen was in desperate need of being saved because its future and its ownership of its assets and his beneficial ownership of Glen through Mr Harjivan's nominee ownership of Glen's issued shares were about to be destroyed by the Thakrar Litigation in general and by the actions of the conspiring lawyers acting for Parties 1, 2 and 4; the Receiver; Ramila and Vijaya through their lies and perjured evidence and the judge through his bias and his procedural improprieties arising from his conduct of trial no. 3.

(2) Glen and its assets had to be saved for its beneficial owner through Subhash's nominee, Mr Harjivan because the claiming parties had, and have, no or no substantial entitlement or enforceable claims. This is because:

(i) Subhash was not liable to Party 2 in the first place and judgment no. 1 was wrong and obtained by the claiming parties' dishonesty and the trial judge's errors of fact, law and procedure;

(ii) Party 2 has no claim against Glen because it compromised all causes of action against Glen during trial no. 1 and any suggestion that that compromise was procured by fraud is unsustainable;

(iii) All parties' claims for costs against Glen are misconceived, inflated and the result of the conspiracy of those parties and their professional advisers to incur exorbitant costs and then recover these unjustifiably from Glen.

(3) Unfortunately, despite every effort by Subhash, a state of the trial has been reached when it looks increasingly likely that judgment will be entered against Glen for all or for most of its assets. This despite the attempt to argue that there was a compromise which, regrettably, Judge Coulson could not be persuaded of.

(4) The only remaining way of derailing the Thakrar Litigation and saving Glen and its assets for its beneficial owner, is to bring that litigation to a premature end. This can be, or at least, might be achieved by the appointment of administrators since this is "the last game left in town".

(5) The appointment of administrators might work in achieving Subhash's objective because:

(i) It would cause the Thakrar Trial to halt since no further proceedings will be possible save for the then-outstanding recusal application that Subhash, as a result of the procedural hearing on 1 March 2007, had arranged for Mr Jones QC to set to work on in an attempt to mount the application in the near future;

(ii) It would lead to the immediate removal of the Receiver from office;

(iii) it would lead to the reinstatement of the Teso charges. Some charges had been removed but Subhash mistakenly believed, or decided to mistakenly assert, that I had removed all these charges;

(iv) It would lead to dismissal of all claiming parties' claims for costs; and

(v) It would stop Ramila and Vijaya's perjured evidence leading to Mr Harjivan being stripped of Subhash's beneficial ownership of Glen.

837. Subhash was not concerned in any way about the inability of Glen to pay its debts as they fell due but was frenziedly anxious about the looming loss of all or most of Glen and its assets. This can be seen from the following matters:

(1) He had made no attempt to ascertain what these debts were until the prospective administrators advised on or just before 29 March 2007 that these needed to be ascertained precisely and in detail.

(2) He and Mr Shelton decided to take no step to appoint an administrator until it became clear that the compromise trial had gone against them, many months after the alleged indebtedness and inability to work with the Receiver had started to show itself.

(3) Glen was in fact able to pay its debts and the principal debt to the Bank of Scotland had only occurred because Mukesh had, deliberately or by omission, failed to arrange for the Receiver to pay the interest instalments for August, September and October 2006 until it was too late to pay them.

(4) Mr Shelton and Mukesh had made no attempt to contact the Receiver at any stage, relying on the assumed and feigned conflict of interest that she found herself in which, even if it existed, she had never demonstrated in a way prejudicial to their interests.

(5) He knew that the Teso charges were a sham and he was therefore prepared to urge their reinstatement. Thus, Glen was more than able, as he saw it, to meet any conceivable debt, other than those owed to claiming parties that his dishonesty and sense of denial declined to acknowledge.

(6) The meeting with the directors' professional advisers at the meeting on 29 March 2007, and Subhash in his frequent briefings of the administrators thereafter, misinformed them in many significant respects both positively and in what they omitted to inform these advisers. In particular, the advisers were not informed fully about Glen's Subhash-dominated management structure, its debts, its beneficial ownership by Subhash, its purpose as a dishonest warehouse of Subhash's ill-gotten gains and its considerable charge-free asset value.

(7) He was prepared to, and did, forge minutes of two non-existent directors meetings in what seems to have been a misguided attempt to assist and hasten the appointment of administrators.

(8) He orchestrated a delaying tactic in early March 2007 whereby the Thakrar Litigation was again held up, this time by Subhash arranging for new leading counsel to be instructed and for Glen to sack without explanation its previous leading counsel. New counsel then, on instructions, applied for an adjournment to enable a full-frontal attack on the integrity of the trial process to be mounted by Glen by means of both abuse of process and recusal applications. This new recusal application was rapidly abandoned by the administrators on first being appointed.

838. Mr Shelton had enormous concerns and worries about this agenda. This was demonstrated, albeit almost by accident, during his evidence and in what was revealed about his attitude in evidence adduced at the trial. In particular:

(1) He knew, and acknowledged in evidence when cross-examined at an earlier stage of the trial, that Subhash, at the very least, had a beneficial interest in Glen and might well be its sole owner;

(2) He clearly had grave doubts about Mr Harjivan's story that he had become the beneficial owner of Glen. He was not prepared to assert that Mr Harjivan was not the owner but, more significantly, he was not prepared to state affirmatively that he thought that Mr Harjivan was the owner and his support of Mr Harjivan was so lukewarm as to betray a clear disbelief in it;

(3) He was enormously relieved when the administrators unilaterally dropped Glen's recusal application, as he revealed in cross-examination during the paragraph 81 application. This may well have been the result of his knowing that he would have been cross-examined on a witness statement put in on 20 March 2007 which contained many errors. One glaring error was put to him during his paragraph 81 application cross-examination and he was very uncomfortable indeed in accepting his errors.

(4) He had written a private memo following Glen's original settlement with SPC in 2002 which indicated that he had thought that Glen was in real danger of losing everything to SPC in its fraud action against Glen.

(5) He had persuaded himself that the part of SPC's claim in the present trial that sought to have the compromise set aside was not being tried. He was again very uncomfortable when it was shown to him during the paragraph 81 application that this view was erroneous and that the setting aside application was currently being tried.

(6) He was also very surprised and uncomfortable when it was shown to him that Party 1 was only a receiver of rents and had no role as a manager and was also uncomfortable when it was pointed out to him that he had never made any attempt to contact the Receiver at any time about Glen's debts and that he could easily have applied to the court for a variation of the injunctions and the terms of Party 1's receivership had he been experiencing any difficulties in ensuring that Glen's debts were being paid.

839. It was the case, of course, that the professional advisers provided detailed and full advice as to the desirability of appointing out of court administrators and the necessary draft board meeting minutes for the meeting that would be needed to approve and adopt that advice and the administrators were able to give the necessary statutory declaration. This occurred on the basis of their correctly and understandably accepting at face value what they had been told at the meeting on 29 March 2007 and also accepting at face value the list of creditors as being a fair and accurate statement of Glen's then current indebtedness.

15.13.3 Directors Improper Motive - Conclusion

840. I conclude that the substantial and primary, if not only, purpose of Glen's directors in appointing or in arranging for the appointment of administrators was an improper motive and that that purpose was not saved by the advice of Glen's professional advisers nor by the statutory declaration signed by the administrators prior to their appointment since these interventions were based on grossly inaccurate and misleading instructions provided by the directors with Subhash's active and interfering assistance.
841. 14 Were the administrators or their legal advisors at fault in any relevant respect in their advice or actions in relation to the administration?
842. At a late stage in the hearing, Parties 1 and 4 widened their attack on the administration and on the motive of the directors in appointing the administrators to include an attack on the administrators and their solicitors. The complaints were that both were culpable in not providing full discovery or information, particularly about the source of the funds that were paid to them, in their failure to approach or co-operate with the Receiver and her solicitors and in their provision of information generally. No attack was made as to their integrity, professional competence or in their roles as officers of the court.
843. It is easy with hindsight to fault professionals who have been so significantly misled by Glen's directors. However, the process of appointing administrators is one fraught with potential difficulty. These professionals had to work at very great speed in relation to a company and its tortuous, complex and chaotic affairs, given that it was considering administration at all, of which they have no prior knowledge. They had had no access to documents and had to take what was said to them at face value. There were no obvious indications of how significant was the difference between what they were told and what was the reality behind those instructions. Given that it had been possible to hoodwink so many over the previous seventeen years, it is difficult to start to be critical, indeed it would be grossly unfair to start to be critical, about the possible shortcomings that had occurred over a few days. I find that there are no grounds for criticising the administrators or their solicitors in connection with the appointment of the administrators.

15.15 Outstanding Issues

844. Four outstanding, indeed crucial, issues remain for decision. These do not arise as part of the fact-finding trial but they must be resolved in the near future, indeed those numbered (2) and (3) need to be resolved at an early stage and, unless agreement can be reached, need to be resolved in advance of the consequences trial.
845. These questions are:

(1) Should the appointment of the administrators cease to have effect or be treated as invalid and, if so, at what specified time?

(2) How should Glen be administered and/or managed in the future?

(3) In the light of the answers to these questions, what relief, if any, should the court grant under paragraphs 11, 81(1) or 81(3) of Schedule B1 or under Section 37 of the Supreme Court Act 1981 and/or the CPR or otherwise in relation to the control, administration and management of Glen?

(4) What costs, from which date and from whom, may the administrators claim their fees, costs and expenses incurred in connection with the administration?

846. The most important and pressing question that must be answered is what is to happen to Glen in the immediate future following the handing down of this judgment. Glen clearly cannot be returned to its previous directors and yet there will be the need for some urgent and some longer term decisions to be taken and for the business to be managed. This will involve:

(1) discovering the full extent of the value of the company's assets;

(2) ascertaining whether there is any realistic point in contesting SPC's claims to set aside the compromise agreement and Tomlin Order and defending that claim if so;

(3) finding the means of providing large interim payments to each group of claiming parties and their legal teams;

(4) negotiating with the HMRC and other creditors;

(5) dealing with the claims of all claiming parties and other creditors;

(6) ascertaining whether all claims can be met in full and, if not, working out a strategy and priority for dealing with the claims; contesting where appropriate the consequences trial if it takes place;

(7) negotiating with all claiming parties and creditors and disposing of what, if anything remains of Glen once all liabilities have been met in full to whoever is entitled to that residue.

847. Meanwhile, it must be decided how the claims will be met whether by selling the business and its assets wholesale or piecemeal or by raising money against the security of the existing portfolio or in some other way. This requires it to be decided whether this future series of decisions should be undertaken within the framework of a court-appointed administration, a liquidation, a court-appointed receivership under Section 37 of the Supreme Court Act 1981, a board of court-appointed or shareholder appointed directors or in some other way. Finally, the identity of the relevant personnel, whether they be liquidators, administrators, receivers, managers or directors must be determined and the day to day management of Glen's properties must be undertaken.

15.16 Conclusion

848. I find that:

(1) The relevant floating charge had not been discharged and it seemed unlikely that it could be argued that that charge should be considered, for the purposes of appointing administrators, as being unenforceable. That question had, however, to be determined following further argument of law.

(2) No Board meeting took place on 13 April 2007. However, Mr Shelton signed the draft minute prepared for Glen by Beachcroft in the presence of, or with the direct knowledge and approval of, Subhash. The question of whether that constituted "appointment by the directors of Glen" as required by paragraph 22(2) had, however, to be determined following further argument of law.

(3) The appointment of the administrators by the directors of Glen, if such took place, was for an improper motive and the conditions for the court to provide for the appointment of the administrators to cease, provided for in paragraph 81(1) were engaged.

(4) The appropriate order to be made in the light of these findings could not be determined without further argument.

849. By e-mail dated 19^th December 2007 I made the following further findings^[331], which are hereby incorporated into this judgment:

(1) For the purposes of any application or decision by the directors to appoint an administrator, the floating charge was valid and was to be treated as valid by the directors unless and until it had formally been discharged or declared void, invalid or no longer operative by an English court;

(2) I find as a fact that no Board meeting took place on 13 April 2007 and only one director signed the decision of the directors, namely Mr Shelton. Neither Mr Harjivan nor Ms Bhatt were consulted nor approved the document signed by Mr Shelton at Subhash's request the document dated 13 April 2007;

(3) I find as a fact that, on 13 April 2007, Glen was not likely to become insolvent and the directors had no bona fide belief that Glen was likely to become insolvent;

(4) Teso did not receive written notice of the proposed appointment of administrators prior to their appointment and did not give its consent, in writing, prior to that appointment;

(5) The decision to appoint the administrators was taken by Subhash, the directors, or more accurately, Mr Shelton on 13 April 2007, merely adopted his decision and implemented it and, in any event, the decision was taken in bad faith.

(6) The directors, and in particular Mr Shelton, did not fairly, fully, accurately or honestly, brief the legal advisors in the meeting at which advice was given as to the appropriateness of appointing administrators and any reliance on that advice by Mr Shelton and the other directors cannot either validate the administrators' appointment or allow it to be confirmed by the Paragraph 81 application.

(7) Evidence of that bad faith was the forgery of minutes of two meetings of the directors which did not take place which was undertaken by Subhash and approved of or acquiesced in by Mr Shelton. These minutes were not used but were retained by Subhash in case they were needed and were discovered pursuant to the search and seizure order issued by the Bankruptcy court to the Trustee.

(8) The administrators had the opportunity to submit any evidence they wished and they participated in the hearing and had the opportunity to make submissions on all these issues.

(9) The decision to appoint administrators was unlawful, a nullity and invalid. Had the appointment been valid, it would have to be set aside under Paragraph 81.

16 Abuse of Process and Recusal

16.1 Introduction

850. The defending parties, being Parties 7 – 14 and 16 – 18, at some stage during the trial either directly or by association with other parties, made a cluster of related applications which may be sorted into two groups. The first group of applications were all to the effect that trial no. 2 was conducted by means and methods that amounted to an abuse of process or to a denial of justice to such a serious degree that the defending parties are entitled to procedural relief. The second group of applications were all to the effect that I displayed such actual or perceived bias or conducted the trial in such an inadequate manner that I should recuse myself. The effect of each application in each of these two groups of application was contended to be any one of the following, listed in descending order of preference: that there should be a permanent stay imposed on the Thakrar Litigation; or a dismissal of the claiming parties' applications and claims; or a direction for a retrial. If there was to be a retrial, I should direct that I should take no further part in the Thakrar Litigation. Finally, whichever decision I took, I should not give a judgment on the merits in this action. If I ruled against all submissions, I should nonetheless withhold publishing my judgment until my rulings relating to these applications had been made the subject of an appeal.
851. These applications were advanced in three stages. Initially, Parties 8 – 13, 14 and 18 combined together to advance a tri-partite application through counsel being Mr Pettican for Parties 8 – 13, Mr Berkley QC for Party 14 and Mr Coney for Party 18. This application was argued on 14 September 2006. All parties agreed that I should determine the applications as part of my judgment rather than being determined there and then. There were then procedural delays occasioned by Subhash-inspired manoeuvring and Party 14 withdrew its applications. However, Party 7 then started to send to the court a series of e-mails which, by the time I came to hand down judgment numbered over one hundred in total. These amounted to a hybrid of the following: evidence, assertion, submission, comment, hyperbole, invective, attempts to re-open decisions already taken, streams of consciousness and downright rudeness. Within these many missives were occasional references to what could be seen as submissions supporting a mistrial or recusal decision. The third phase started with Glen, by different leading counsel, obtaining permission to submit a new and more detailed and wide-ranging recusal application. This had been formulated when it appointed administrators who rapidly announced that it was being withdrawn. In this third phase, Kiran notified the court that Parties 16 and 17 were aligning themselves with the on-going applications of Parties 7 – 13 and 18 and that that I should regard Subhash as making in his role as Party 7.
852. I consider that Parties 7 – 13, and 16 – 18 have outstanding applications and that these are advanced through the submissions made in September 2006 by Parties 7 – 13, and 18, by the volumes of e-mails submitted by Subhash and by a short and restrained further submission of Mukesh submitted by e-mail on 12 July 2007.
853. I should record at the outset that none of the defending parties made any detailed submission of law. With such a wide-ranging series of applications, a detailed analysis of a difficult area of law which clearly distinguishes the appropriate tests, which differ, for each type of abuse relied on and addresses the appropriate relief is necessary on a party by party basis. Had I found that any of the applications demonstrated even an arguable case for relief, I would have restored the applications for further submissions of law. Since this is a fact-finding judgment, it is sufficient for me to determine the necessary background facts. I remind myself, however, that recent authorities have made it clear that an applicant seeking to unsettle a trial once it has started must move to apply for a mistrial or re-trial or recusal very promptly after any matter of significant and legitimate complaint has arisen. I would need some persuading that the applications had been made sufficiently promptly to afford relief, even if the applying parties had crossed the threshold for granting relief.

16.2 Glen's Withdrawn Application

854. I do not propose to address this application because it was withdrawn. However, Party 2 lodged a powerful outline submission that contended that the entire application should be dismissed. I have added that submission to this judgment as a schedule so that, if any question arises in the future as to the grounds or validity of Glen's recusal application, there is a record of what would have been argued in order to seek to persuade the court to dismiss that application. I should record that I found these submissions very persuasive and that is putting it mildly.

16.3 Mr Harjivan's Application

16.3.1 Introduction

855. Mr Harjivan's complaints were as follows:

(1) Findings of fact are to be relied upon which were made in previous proceedings to which Mr. Harjivan was not a party;

(2) Mr Harjivan was joined to existing proceedings at a very late stage and too close to the trial;

(3) There was gross inequality of arms in relation to resources;

(4) Mr. Harjivan was not represented until the closing stages of the trial.

840. In the light of these complaints, it was submitted on behalf of Mr. Harjivan, that the proceedings had been so flawed, and his position so compromised, that no findings could fairly be made. The only just way of proceeding would be to order a new trial before a differently constituted tribunal.

16.3.2 Summary of Mr Harjivan's Position at the Thakrar Litigation and in Trial No. 2

856. In considering the abuse of process and recusal applications made on behalf of Mr Harjivan, it is worth considering Mr Harjivan's position generally. Mr Harjivan's involvement as a party in trial no.2 was to face and meet the Trustee's claim for a declaration that the beneficial ownership of the shares in Glen and Teso were vested in her because Subhash was and always had been the beneficial owner of Glen and Teso. However, and because of the close interconnection with Subhash, the Thakrar family and 'Ramila' and 'Vijaya', Mr Harjivan was also an important witness in the other actions consolidated with the Trustee's action. It is necessary to keep Mr Harjivan's two roles clearly in mind. As a witness in connection with the proceedings other than those brought by the Trustee, Mr Harjivan had no right to representation. Nevertheless, because the court had directed that all the related proceedings should be consolidated, Mr Harjivan had the opportunity to be represented when giving evidence and he had the benefit of experienced solicitors in the lead up to the trial and the benefit of experienced solicitors and counsel for much of the period over which he gave evidence^[332].
857. Mr Harjivan's experienced litigators have helped Mr Harjivan restate his written evidence in no less than six statements served between 6 September 2006 and 3 October 2006^[333] and to re-write his defence. All of this material has been evaluated against Mr Harjivan's own oral evidence and all the other evidence adduced at trial no. 2.
858. The onus of proof in relation to the acquisition and ownership of Glen and Teso rested throughout with the Trustee and, in the light of the nature of the allegations made against Mr Harjivan to the effect that he was fraudulently and dishonestly contending for non-existent contracts that had led to his acquiring these companies, the criminal evidential standard was applied. The Trustee therefore had to prove her case beyond reasonable doubt. In relation to the Trustee's claim against Mr Harjivan, Glen and Teso maintained a position of neutrality and their officers, Mr Shelton and Mr Barby, have given important evidence that helped to undermine Mr Harjivan's case. However, the most telling evidence against Mr Harjivan came from Vijaya and Ramila. In particular, they succeeded in showing that they had no knowledge of their supposed involvement in these companies and they also denied having had any dealings with Teso.
859. Mr Harjivan was given a very ample opportunity to put forward any credible evidence to support his case that he acquired these companies. As I have found, he has totally failed to produce any evidence or any basis for undermining the overwhelming evidence relied on by the Trustee for showing that he at no time had any interest in either company. Thus, there is no basis for me to declare that there has been a mistrial or that there should be either a recusal or a retrial.
860. By late April 2006, Mr Harjivan was able to set out his basic case sufficiently clearly to Ross & Craig, his then solicitors, for it to be summarised in the statement of his solicitor Mr Keith Pearlman, and characterised by Mr Pearlman, as a defence having a real prospect of success in evidence served in support of his application to set aside the default judgment initially entered in the absence of the requisite notice of his intention to defend the proceedings being served.
861. It is worth tracing the evolution of Mr Harjivan's defence. According to Mr Harjivan, Subhash approached him in 1997 or early 1998 to propose the transaction and that:

"The purchase consideration was paid in late 1999 and early 2000 and Mr Harjivan also settled various outstanding loans to third parties in East Africa, India, Spain, Portugal and the UK"

862. In June 2006, when Mr Harjivan filed his first defence, the alleged purchase from Ramila and Vijaya in 1999-2000 was confirmed as having taken place at numerous places in the document but no explanation of the consideration or how it was paid was given.
863. In July 2006, Mr Harjivan gave the first part of his oral evidence and in the witness box he spoke to his defence by reference to a document he produced which he was able to refer to whilst giving evidence which was called his "MH2-Defence" document.^[334] Mr Harjivan was put under no pressure during questioning in relation to his alleged acquisition of shares in Glen and Teso. In relation to Teso, he said he had never owned any shares in Teso nor had he had any involvement in Teso. In relation to Glen, he was asked the open question :

"Could [Mr Harjivan] explain the background to becoming the owner of these shares?".

864. In response, Mr Harjivan stated that he had paid approximately £12 million of which £3 million was transferred from South Africa to a family in Uganda, and another part was a transfer from Australia for a lady that lived in Kenya and the rest was expenses and building work. He also stated that the instruction to make the payments was mostly done through small notes and once or twice over the telephone. Mr Harjivan was also asked to write down any names of recipients and was to revert with any names, initially after the lunch break and then, on the next day.
865. There were no records retained by, or available to, Mr Harjivan because, according to him, one of his brothers probably threw them away. No list of names was produced overnight. However, Mr Harjivan said he could remember some names. In the course of the afternoon of day 8, Mr Harjivan eventually produced a note of 4 names^[335] to whom the monies were allegedly sent but he was unable to explain how the money was paid or how much was his own money or how much he borrowed or the source of his borrowings.
866. In so far as it is set out in writing, Mr Harjivan's evidence, obtained with the assistance of his new legal team, remained broadly the same as that advanced in April, June and July 2006 in his previous written and oral evidence. In his draft Points of Defence, settled after Mr Harjivan had given evidence in September 2006 and 'served' in draft on 29 September 2006^[336] in conference with experienced legal representatives and an interpreter, that factual case is explained as follows :

"By an oral agreement made between [Subhash] and [Mr Harjivan] … at a meeting between them in the winter of 1998/9 [Mr Harjivan] agreed to buy the [Glen and Teso] shares for £12m. … The said consideration of £12m was paid at the direction of [Subhash] at various places at various times and in various amounts in India and Africa … By 2000 the said consideration of £12m had been paid in full and in the premises [Mr Harjivan] thereupon became the beneficial owner of the said shares".

867. By the time Mr Harjivan came to be cross-examined in October 2006 almost 6 months had passed since his original statement had been prepared with the assistance of Mr Pearlman.^[337] That gave Mr Harjivan more than ample time to formulate a coherent version of events with some prima-facie credible supporting evidence. However, no coherent version of events was ever put forward by him in evidence and, apart from the list of 4 names created by Mr Harjivan long after the event, not a single supporting document was ever produced despite having been given several opportunities and extensive time to produce such documents. Indeed, he was allowed to give evidence in two phases so as to allow him further opportunities to find and produce any material document evidencing the transactions he referred to in his evidence. I subsequently have found that Mr Harjivan's evidence is a concoction that was made up by Subhash. I have also found that Mr Harjivan is a liar and a stooge for Subhash.
868. A new trial before a different judge could not change straightforward circumstances: (1) Mr Harjivan did not purchase Glen or Teso and did not pay £12 million, or anything at all, in the supposed performance of an agreement to that end, and (2) there was no documentary evidence of any kind, whether contemporaneous or otherwise, nor any oral testimony that Mr Harjivan has been able to point to or obtain that could alter those facts. The transactions he referred to in evidence would have inevitably thrown up many documents including bank statements, financial records, telephone records and such like. All these documents would have been exclusively in Mr Harjivan's possession and only he could disclose them. None were forthcoming.

16.3.3 The Effect of Previous Proceedings

16.3.3.1 Mr Harjivan's Submission

869. It was contended on behalf of Mr Harjivan by counsel, who made the submission for a recusal, retrial or declared mistrial, that the claim brought against Mr Harjivan by the Trustee for a declaration that Subhash was the beneficial owner of the shares in Glen and Teso was heavily reliant on findings made in trial no. 1 to which Mr Harjivan was not a party. Mr Harjivan is, in reality, a party to enforcement proceedings and therefore the Trustee will be able to prove her case against Mr Harjivan by putting forward without further need of proof findings made in the earlier trial. It was correctly submitted that it is a fundamental principle of law that someone is only bound by findings in proceedings to which he was a party. For this reason alone it was contended that a new trial before a different tribunal should be ordered.

16.3.3.2 Finding – Effect of Previous Proceedings

870. However, it can be seen from the summary of Mr Harjivan's evidence explaining why he had bought the two companies, that no findings in trial no. 1 were used in order to prove beyond reasonable doubt that Subhash alone was the beneficial owner of both companies and Mr Harjivan had no interest in either of them. Moreover, extensive evidence was relied on by me to support my overall finding as to beneficial ownership, none of which had been adduced at the first trial. Thus, the premise of this submission was not remotely made out and the need to consider a retrial does not arise.
871. 3.4 Inequality Between Claiming Parties and Mr. Harjivan

16.3.4.1 Mr Harjivan's Submission

872. It was contended on behalf of Mr Harjivan that there had been a gross inequality of arms available to him compared to what had been available to the claiming parties. That had been the position throughout the trial and it was contended to have remained the position until the end.
873. A summary of this submission is as follows. It was contended that in any normal proceedings, the parties at least start off from the same point at the same time. However, the Thakrar Litigation was not normal proceedings. This was because their history went back at least ten years. Originally, there were eleven actions rolled into the Thakrar Litigation, all of which were being heard together. In an interlocutory judgment on 3 July 2003 in an interlocutory appeal application made in the course of action no.1, Hale LJ described the Thakrar Litigation as a "highly complex case". Mr. Harjivan was served with proceedings joining him into the Thakrar Litigation at the end of March 2006. At that stage, trial no. 2 was due to start on 3 July 2006. In effect, therefore, Mr Harjivan had only two months to prepare for a trial that was being added to this complex litigation whose purpose was to deprive him of the beneficial ownership of assets worth, on Subhash's estimate, at least £40 million.
874. It was then contended that no team of lawyers, however well funded, could have got to grips with the morass of paperwork in the time between Mr Harjivan's joinder and trial. The case against Mr. Harjivan was part of a much larger overall picture with an extensive background. The Court was asked to draw inferences from a morass of oral and written evidence, some of which pre-existed trial no. 2, some was adduced for it and, in the event, some was also adduced during it.
875. Thus, under any normal circumstances, either: (1) the application to join a new defendant at such a late stage would never have been made, or, if made, would have been refused; or (2), the fixture would have been broken and a new trial date given some months down the line.

16.3.4.2 Finding – Inequality Between Claiming and Defending Parties

876. As a party, Mr Harjivan has had the benefit of very experienced counsel and solicitors with ample time and funding to prepare and present Mr Harjivan's case. It may have been true that in the initial stages of the action from the time Mr Harjivan was first joined, he was at a disadvantage. Judgment in default of the service of his intention to defend was entered but he engaged, funded by Subhash from Glen's resources, an experienced team of solicitors and counsel who prepared his application to set the default judgment aside. That team then withdrew, just before the hearing of this application, due to lack of funds. It can now be seen that that shortage of funds arose because Subhash could no longer, with Mukesh's assistance, obtain funds from Glen.
877. I then ordered that the application to set aside the default judgment should be joined to the trial no. 2 and heard with it. Thus, Mr Harjivan was to join into the action on the merits and he prepared his lengthy defence document. It is, however, something of a misnomer to state that Mr Harjivan prepared the defence document and its associated "crib" being the document in Portuguese he took with him into the witness box containing a summary of the defence to assist him in refreshing his memory as to the case Subhash had primed him to present. The misnomer "Mr Harjivan's preparation" arises because the entirety of the lengthy and detailed documentation he submitted as a pleading and used as an aide memoir at the trial is now known to have been prepared by Subhash as part of his conspiracy with Mr Harjivan for Mr Harjivan to present perjured evidence aimed at showing that Mr Harjivan had acquired both Glen and Teso for £12 million. This case was presented without Mr Harjivan being able to produce one document which supported or corroborated the unbelievable story that he put forward. Mr Harjivan had every opportunity to seek out and put forward such documentation as existed in his possession or which had been disclosed.
878. On the second of the two days Mr Harjivan gave evidence in his first spell in the witness box, the day concluded by my making a lengthy statement to Mr Harjivan in the presence of all parties which was recorded on the transcript in which I invited him to seek out all documents available to him that showed that he had borrowed money, paid money to third parties or used his own money to contribute to the purchase price of Glen and Teso or to the borrowings he contended he had lent to the Thakrar Family. He was invited to return to give evidence with his son and daughter and he was provided with funding to enable him to be represented at the resumption of his evidence and to prepare for that second spell in the witness box and to seek out any further documentary evidence he wished to adduce to support his case.
879. Once his new legal team were instructed, they were provided with the transcripts of evidence already given and the trial documentation and they had a full opportunity to consider the transcripts, take instructions and then prepare the five further witness statements that Mr Harjivan then put in. No documents were put forward, despite my invitation to Mr Harjivan to provide further discovery and the principal change or addition to his evidence previously given which was otherwise confirmed was the revelation that Subhash had prepared his previous defence documentation.
880. Although the overall Thakrar Litigation is complex, Mr Harjivan's role as purchaser of Glen and Teso from Ramila and Vijaya is just one chapter in the saga and in terms of length and complexity, is one of the shorter chapters. Mr Harjivan was ultimately a party for eighteen months before the trial was concluded which is more than enough time to formulate his case and evidence on the issue that concerns him directly.
881. The court was not asked to draw inferences about Mr Harjivan or his case or his evidence at all, let alone from "a morass of oral and written evidence both pre-existing this trial and adduced for it". Instead, the court was asked to accept the relatively brief oral evidence of Mr Harjivan presented without any supporting documentation and having had every opportunity with Subhash and his two separate legal teams to prepare that case. There is no indication that Mr Harjivan has been deprived of an opportunity to access documents he wishes to deploy or a reasonable opportunity to give the evidence he wishes to put forward. Mr Harjivan's difficulty is that there never were any documents to support his case and, as he admitted in relation to his extraordinary evidence about PO Box 1127, Maputo, Mozambique, he could not always remember what Subhash wanted him to say.^[338]
882. There is, therefore, no basis for his complaint that he lacked equality of arms or is entitled to a re-trial or a new trial.

16.3.5 Adherence to the Time Table

16.3.5.1 Mr Harjivan's Submission

883. The trial was conducted pursuant to an urgent time table that had been fixed and was to be adhered to for reasons that had nothing to do with the case involving Mr. Harjivan. The urgency arose out of the fact that Parties 8 – 13 had, and still have at the time of the handing down of judgment no. 5, a pending appeal to the Court of Appeal, and the Court of Appeal have previously indicated that if the present trial was not proceeded with expeditiously, that Appeal would be listed for hearing.
884. In the judgment dated 13 June 2006 handed down by myself, I refused Parties 8 – 13's application to adjourn the trial on two particular grounds. Firstly, I held that those parties had had since October 2005 to prepare for trial and to arrange funding for their representation. Secondly, those parties could not reasonably complain that the urgency to hold the trial was created by reference to the pending appeal as it was their appeal and it was they who had indicated that they wanted the appeal heard speedily.
885. None of these considerations applies to Mr. Harjivan. However, it goes much further than that because Parties 8 – 13 have had the advantage that Mr Harjivan was deprived of, namely that they have been involved in the Thakrar Litigation for years and they are familiar with the extensive background, with the documents, and with the allegations that are in play. Furthermore, they were previously advised and represented by lawyers and their evidence was prepared by lawyers.
886. Overall, it was submitted that even if Mr. Harjivan had had legal representation throughout, it would have been unjust for the trial to proceed when it did. Adequate preparation could not have been done in the time available. It is doubtful whether even with a team of solicitors instructing leading and junior counsel, Mr Harjivan's case could have been ready for trial without it being adjourned. In fact, Mr Harjivan had no representation at all. Accordingly, what would in any event have been unjust became flagrantly so.

16.3.5.2 Finding - Adherence to the Time Table

887. In relation to the submissions reliance on the contention that Mr Harjivan was unfairly locked into a rapid timetable for the trial as a result of the directions of the Court of Appeal that related to a part of the Thakrar Litigation which he was not concerned with, it must be borne in mind that the Court of Appeal made it clear that the appeals would follow the determination by the trial judge of trial no. 2 and left the timetabling of the present trial to the trial judge of that trial.
888. As to the more general submission that Mr Harjivan was rushed into and through a trial without a fair and full opportunity to present his case, that submission fails for the reasons already set out. As it turned out, he has had fifteen months of trial time for a trial that has only occupied about 30 working days, most not concerned with issues directly affecting him. In the lengthy gaps between hearings, Mr Harjivan has had the opportunity of funded representation to prepare his defence and to obtain and present any supporting evidence. In fact, he relied totally on Subhash and the coaching Subhash gave him to present a shadow case of Subhash's which he knew nothing about and which he had difficulty, at times in remembering.
889. Overall, as was submitted by Party 4 in response to this submission of Mr Harjivan's his "case" was invented, incredible and false. Mr Harjivan never had any prospect of successfully defending the Trustee's claim and no "team of solicitors instructing leading and junior counsel" could ever have done anything with that case. In fact, Mr Harjivan was exceptionally well represented by solicitors and counsel, his problem is and always has been that he does not have an honest defence or a case.

16.3.6 Lack of Legal Advice and Assistance and of Representation

16.3.6.1 Mr. Harjivan's Submissions

890. The alleged lack of legal representation fell into three categories, namely the lack of adequate legal advice and assistance and representation prior to the trial and during the trial and the added burden created by Party 1 entering a default judgment against Mr Harjivan due to the delay in entering a notice of intention to defend.
891. Default judgment. It was submitted that the Trustee should not have applied for a default judgment in the circumstances she did, the Court should not have entertained that application, and there should not have been a Declaration that Subhash was the beneficial owner of the shares in Glen and Teso. Moreover, the default judgment should have been set aside following the application made by Mr Harjivan's then solicitors, Ross & Craig, dated 26 April 2006. Furthermore, the declaration set out in the default judgment was deliberately and specifically used to deprive Mr. Harjivan of his ability to be legally represented.
892. Denial of legal representation pre-trial. In respect of representation pre-trial, Mr. Harjivan did not have:

(1) Any explanation as to the case against him;

(2) Any advice as to his position; and

(3) Any legal help with preparation of his case.

893. Further, this was a case where the pleaded case against Mr. Harjivan consisted of two lines in a lengthy document which read: "The Fifth Respondent claims to be the sole shareholder in and beneficial owner of the First and Second Respondents". Even if he had not had any language difficulties, Mr Harjivan would not have had any understanding of the case he had to meet.
894. Denial of legal representation during the trial. The effect of being deprived of legal representation during the trial was that Mr. Harjivan in effect took no part in the trial. In addition, he went into the witness box and was cross examined at length and in detail without the protection of counsel.
895. Effect on Mr. Harjivan. It is fundamentally unjust to deprive a litigant of legal representation in any case. It is even more objectionable in a case where litigant is thrown into highly complex litigation of which he has no prior warning, of which he has no prior knowledge, where there are numerous pleadings and where there are thousands of documents. It was yet more objectionable when that litigant is a foreigner who does not have a functional grasp of English.
896. The claiming parties' position. Mr Harjivan's position should be contrasted with the position of the claiming parties. The Trustee was represented by leading counsel instructed by both a senior solicitor and his assistant solicitor. Parties 2 and 4 were separately represented by both senior junior counsel and solicitors. Furthermore, there was very close community of interest and it was apparent that throughout the trial the claiming parties' lawyers were able to co-operate to a very high degree amongst themselves.
897. Furthermore the claiming parties had expert legal teams who had the advantage of enormous familiarity with the case and with the voluminous documents, largely gained over years of involvement in the Thakrar Litigation. Finally, Vijaya and Ramila made common cause with the claiming parties. They were cross examined by the claiming parties' counsel with the effect that that cross-examination elicited evidence that not only wholly supported the claiming parties' cases but, in the end, totally destroyed the defending parties' cases.
898. The effect on the trial. Mr. Harjivan had no ability to challenge any evidence called from any witness. Provision of daily transcripts to him was in reality a worthless gesture. When Mr. Harjivan's application for an adjournment was refused, part of the reasoning was that the witnesses would be cross-examined by other parties. In the event, no-one cross examined any witness in terms that would have assisted Mr. Harjivan. Glen and Teso were not represented during the trial and no-one cross-examined on either of their behalfs, as might have been expected.
899. Had Mr. Harjivan had access to funding, the application made by Ross & Craig would not have been an application to come off the record: it would have been an application to adjourn the trial. That application, properly made, would have had to be granted.
900. Denial of an adjournment and lack of legal representation has meant that Mr. Harjivan has been forced to rely upon Subhash. That was objectionable for a number of reasons:

(1) Without the ability to read English and without any knowledge whatsoever of the previous history of this matter, Mr. Harjivan did not know about the allegations of fraud against Subhash, or the findings made against him in the previous judgment.

(2) Mr Harjivan's reliance upon Subhash was relied upon by the claiming parties as evidence of the close connection between the two and of the fact that Mr. Harjivan was Subhash's pawn rather than his own man.

(3) Mr Harjivan did not have the opportunity of putting forward a clear case from the outset. Instead, he had to put forward a Points of Defence document which did not properly reflect his case.

(4) The court and the parties, in reliance on Mr Harjivan's e-mail communications, assumed in Mr Harjivan a level of competence in the English language and of familiarity with the case, that did not exist. That error would not have arisen had he been represented throughout by lawyers.

(5) That Mr. Harjivan did not tell the truth about the way that the Points of Defence document was drafted was used against him as to credit.

(6) The impression that all that has created cannot be dispelled: it is of itself a further discrete sufficient reason for a new trial.

(7) The inequality of arms persisted throughout the trial. Mr. Harjivan's lawyers in the time they were representing him never acquired a similar familiarity with the case and with the documents as the claiming parties' lawyers had had the opportunity of doing. Mr. Harjivan's counsel, for reasons of proportionality, did not, by way of example, read the pleadings or transcripts of the previous trial nor many of the documents that were disclosed at a late stage before and during the trial.

16.3.6.2 Findings - Lack of Legal Advice and Assistance and of Representation

901. Lack of legal advice, assistance and representation. Mr Harjivan's evidence demonstrated the extent to which he had been involved in the Thakrar Litigation prior to his first instruction of solicitors:

(1) It was clear from Mr Harjivan's oral evidence^[339] that the issue of ownership of the shares had been raised and discussed between Mr Harjivan and Subhash at an early stage of the present proceedings.

(2) Mr Harjivan also stated, when answering questions put in cross-examination by counsel for Party 2, that Subhash had shown him copies of documents bearing Ramila's and Vijaya's signatures in order to verify that the signatures on the letters dated 6 and 9 December 2000, purportedly written by them to Mr Shelton requesting the transfer of their shares in Glen to Mr Harjivan, were their signatures, and that Subhash had done this some time in 2004-2006 in connection with the present proceedings.^[340]

(3) In cross-examination, Mr Harjivan was unable to remember documents shown to him by Subhash but he had exhibited documents, including some bearing suffix reference to pages in Volume C of the 2003 trial bundle, purportedly signed by Ramila and Vijaya, which signatures are disputed by them, to his first Defence document.^[341]

(4) In December 2005, Mr Harjivan had the benefit of two days of meetings at Dechert, the solicitors then representing Glen, with Mr Barby, Mr Shelton and Subhash^[342]. Between April and June 2006, Mr Pearlman and Miss White of the solicitors, Ross & Craig represented Mr Harjivan and although not involved in drafting Mr Harjivan's original defence, it seems from Mr Harjivan's third statement that Miss White at Ross & Craig reviewed and approved a plan for it. Since 26 July 2006, Scott & Co instructing Mr Coney have represented Mr Harjivan. Mr Harjivan's evidence concluded on 9 October 2006.

(5) Over this period Mr Harjivan had had more than sufficient time and representation to formulate and express a true account of his acquisition of any beneficial interest in Glen and Teso. Indeed, at the December 2005 Decherts' meetings, Mr Harjivan's professed payment of several million pounds to Vijaya for Glen and Teso was the subject of discussion involving Mr Harjivan.^[343]

902. The general principle. It is entirely uncontroversial that, in the context of Mareva or asset freezing injunctions, which are granted and intended to prevent claimants or successful parties from being cheated out of the proceeds of their entitlement, allowance is made for the payment of ordinary bills and living expenses and a reasonable sum for legal representation for the party subject to these freezing orders. Far from being overridden in this case, this principle has been more than fully honoured with third party funds being made available to Mr Harjivan for his legal representation. In the context of equality of arms, this is in a case where two of the claiming parties are in person assisted by a McKenzie friend and the other claiming parties have exhausted their available funds, are impecunious, have significant outstanding awards of costs in their favour and could only proceed as a result of the generous indulgence of their legal teams with regard to funding. In the case of Party 1, she could only proceed with the benefit of a Conditional Fee Agreement, for want of available funds in Subhash's estate with which to fund her representation.
903. Application of the general principle to Mr Harjivan The overall litigation is complex but the core issue concerning Mr Harjivan was always straightforward. As already set out, it was this: was Mr Harjivan the beneficial owner of Glen and Teso? In the circumstances of this case, this fact based question was: did Mr Harjivan buy the shares in Glen and Teso from Ramila and Vijaya, and, if so, what, how, when and where did he pay for those shares? Mr Harjivan had considerable prior warning and prior knowledge of the litigation before he was joined as a party. In particular, he attended a two-day meeting at Decherts in December 2005 in the course of which the 'purchase' of Glen and Teso from 'Ramila' and 'Vijaya' was discussed. Although there were numerous pleadings and thousands of documents; there are very few pleadings and even fewer documents concerning the issue affecting Mr Harjivan. In addition, Mr Harjivan had the unusual advantages of:

(1) An opportunity to set out his defence twice. On the first occasion, this was approved by Ross & Craig and on the second occasion, it was pleaded by counsel; and

(2) A period of several months in which to hone his defence and produce any relevant documentation with two spells in the witness box and the opportunity to speak to his legal team, prepare further defence documentation and discuss his case between the two spells of cross-examination.

904. The claiming parties' position. Vijaya and Ramila were assisted and represented by their younger brother, Shimeer, who is an accountant, as a McKenzie friend. They were cross-examined by counsel for the other claiming parties and the reason why their evidence was "wholly supportive of the claiming parties' cases" was that they told the truth and could support what they said with relevant and credible documentation, particularly as to their means. Thus, Ramila produced her P60 and a payslip to demonstrate that she was a low-wage earner and Vijaya produced photographs of shop and home to demonstrate her and her husband's modest circumstances.
905. In contrast, at court on 3 October 2006, Mr Harjivan produced a Nilesh Exim letter, which I find was a forgery,^[344] and proceeded to explain that in fact the company in which he had allegedly invested £1.6 million on his own account and a further £1.6 million allegedly loaned to the Thakrar family had yet to be formed.^[345]
906. Effect on the trial. Mr Harjivan did not have to cross-examine anyone. He is not a claimant and had nothing to prove. If he had a credible defence, it would have become clear in the course of the numerous opportunities he has been given to tell his side of the story. The reality is that his story is so incredible that his own counsel could not risk examination in chief condescending to any relevant detail.^[346] Contrary to Mr Harjivan's submissions:

(1) Glen and Teso were represented during the trial, Glen by the same solicitor as Mr Harjivan instructing different counsel, Mr Berkley QC and Teso by its director Mr Barby.

(2) It is most unlikely that an application by Mr Harjivan to adjourn the trial would have succeeded if it had been made prior to the first day in July 2006 in the absence of an identified defence having a real prospect of success.

(3) Mr Harjivan preferred to rely wholly on Subhash even when he was represented by experienced solicitors and counsel and even after learning of the allegations and findings against Subhash. Even after protesting his shock in the witness box at learning of Subhash's dishonesty, Mr Harjivan still continued to discuss the case and to accept directions from Subhash.^[347]

(4) Mr Harjivan prepared six statements and rewrote his Defence document with the assistance of solicitors and counsel. Had there been anything approaching a credible explanation or a defence with a real prospect of success available to Mr Harjivan, it would have surfaced sufficiently clearly to have been capable of being understood and evaluated.

(5) Mr Harjivan's credit does not depend exclusively, or even significantly, only on the evidence that he gave initially in July 2006. His dishonesty was admitted on a number of occasions when he resumed his evidence in October 2006. This included in relation to the choice and use of PO Box 1127 as a fictional address for himself, his son and Vijaya.

(6) There was no relevant inequality of arms. Mr Harjivan's difficulties arose from the fact that even when on oath Mr Harjivan was unwilling to tell the truth, or as he put it:

"I could not resist lying."^[348]

16.3.7 Overall Conclusion – Mr Harjivan's Abuse of Process and Recusal Applications

907. Mr Harjivan's abuse of process and recusal applications fail.

16.4 Parties 8 – 13's Application

16.4.1 Introduction

908. Parties 8 – 13 made two separate submissions in support of their abuse of process and recusal applications. The first, made by counsel then representing them, was made in September 2006 in conjunction with similar applications supported by similar submissions made by counsel then representing Glen and Mr Harjivan. That application was, therefore, a tri-partite application. The second consisted of a brief written submission submitted by Mukesh towards the end of the trial. I will deal with both submissions.
909. These submissions identified general heads or grounds for making these parties' applications:

(1) Parties 8 – 13 lacked any funding and were ineligible to obtain funding from the Legal Services Commission. In consequence, they were only legally represented at the trial for part of the trial, albeit at those parts of the trial in which they were directly involved. Apart from counsel, on the days when he was present in court, these parties' cases were advanced and these parties were represented only by Mukesh and Vijay.

(2) Parties 8 – 13 were faced by the combined weight of legal representation and a co-ordinate presentation of their respective cases by Parties 1, 2 and 4. This had the effect that Ramila and Vijaya's evidence was not challenged or cross-examined by a party with an adverse interest to those two sisters. This lack of cross-examination arose with all other witnesses whose evidence was adverse to the cases of the defending parties. Apart from counsel, on the days when he was present in court, these parties' cases were advanced and these parties were represented only by Mukesh and Vijay.

(3) The trial process was conducted in such an unfair manner that it caused Parties' 8 – 13 irredeemable prejudice and prevented their respective cases being considered properly or at all. In particular:

(i) There was an absence of clarity in the identification of the issues and claims made by the respective claiming parties;

(ii) There was an absence of traditional disclosure and inspection at any stage prior to the calling of witnesses;

(iii) There was a massive yet largely unorganised and unwieldy volume of documentation which comprised the trial bundles of documents that were used at the trial;

(iv) There was an absence of any real opportunity afforded to the defending parties to prepare the case in advance of the calling of evidence; and

(v) The trial became so complex and unwieldy, due to so many different parties, claims and applications being combined into one hearing, that it became impossible for the trial judge to reach a fair and just determination of all the issues.

(4) The trial caused these parties considerable hardship. Mukesh's health has suffered since he is a diabetic and it caused him to become both physically and mentally exhausted. This was also the case for his sibling parties as well.

16.4.2 Parties 8 – 13's Submissions

16.4.2.1 Absence of Funding and Legal Representation

910. No funding. Parties 8 – 12 were not in a position to fund the representation needed to ensure that their interests were protected properly in the Thakrar litigation. Counsel, Mr. Pettican represented these parties for the first eighteen days of the trial and he expressed concern that whilst he was representing these parties that case management and other directions continued to be issued in the Thakrar Litigation which had the effect of increasing, rather than decreasing, the burdens placed on Parties 8 – 12 who were in any case struggling to protect their interests with minimal funding.
911. With a view principally to alleviating the funding difficulties of Parties 1 and 2, the court made a series of orders on the 2 August 2006 for the appointment of the Trustee as a Receiver over a number of properties and providing for her to receive payment for her services. Since these orders were made, Mukesh was subjected to a barrage of demands from the Trustee's solicitors to obtain, locate and produce documents which the Trustee and her solicitors believe to be required to enable her to carry out her duties as a Receiver. Whilst the Trustee and her solicitors were remunerated for their work, no offer of payment has been made to Mukesh or SKTL in respect of the substantial amount of work undertaken by Mukesh in order to assist the Trustee.
912. Having been made with a view to alleviating the funding difficulties of Parties 1 and 2, the orders made by the court on 2 August 2006 in fact added to the funding difficulties of Parties 8 – 12. This was because, as a result of those orders, the Trustee embarked on enforcement proceedings in respect of property jointly owned by Subhash Thakrar and other members of the Thakrar family. In consequence, resources had to be directed towards addressing the orders being sought which might have otherwise been available to Parties 8 – 13 in the Thakrar Litigation.
913. £290,000 stood in the court following an order of the Court of Appeal as a condition of Parties 8 – 13 being permitted to pursue their appeal from part of the judgment in judgment no. 1. This money was paid into court by Parties 8 – 13. Counsel on behalf of Group 4, at one stage during the trial intimated his intention to make an application to the Court of Appeal for the release of £250,000 of this money to his clients in order to fund their ongoing participation in the Thakrar Litigation. At paragraph 83 of my ruling on 21 August 2006, I stated, in connection with this intimation:

"I am able to give, by way of general indication, the view that if I had any jurisdiction to hear or deal with this application, if mounted now, I would start from the standpoint that it was an application which had much merit and would require very careful consideration".

This was a prejudicial intimation by both counsel and myself since it threatened further the unfair balance of representation and resources and indicated an undue partiality in the mind of the judge towards the claiming parties.

914. It was accepted by Parties 8 – 13 that Party 4 also experienced difficulties in continuing to fund the level of legal representation which they have received before trial no. 2 started and in the early stages of the trial. However, it was contended that those difficulties paled into insignificance by comparison to the position of Parties 8 – 12. Throughout the hearings, the Trustee and Party 4 consistently sang from the same hymn sheet. Thus, even if Party 4 had not been represented by counsel and solicitors, the interests of Party 4 would nevertheless have been protected by the Trustee, appearing through leading counsel who was instructed by Balsara & Co.
915. Counsel, Mr. Pettican, accepted instructions directly from Parties 8 – 13 to act under the Bar Direct or public access scheme just before the trial started in what Parties 8 – 13 considered to be their desperate circumstances. This had consequent limitations on his ability effectively to participate in the evidential hearings. Mr. Pettican considered after Day 18, that a point had been reached at which he concluded that it was no long possible for him as counsel, acting alone without solicitors, to ensure that the interests of Parties 8 – 13 were protected in view of the manner in which the Thakrar Litigation was being case managed by the Court. Counsel raised two specific concerns:

(1) There simply was not a level playing field in the Thakrar Litigation as presently case managed and that, in many cases, the case management directions which have been given have tended to exacerbate the inequality of arms between the opposing parties.

(2) The combined cost to the parties of the evidential hearings which took place throughout the early stages of the trial were undoubtedly enormous. This submission was made in conjunction with a submission that the court should impose a stay to enable a mediation exercise to take place. Counsel's decision to withdraw was, in part, intended to assist in the establishment of a further mediation exercise.

916. 4.2.2 Inability to Challenge the Claiming Parties' Cases
917. This submission, particularly advanced by Mukesh, was in reality a further way of expressing the concerns of Parties 8 – 13 that they had did not have adequate representation particularly in testing by cross-examination Ramila and Vijaya. This was due to counsel being unable to get the case up in the time available to him and to the lack of experience of Mukesh and Vijay once counsel withdrew.
918. 4.2.3 Systemic Unfairness of the Trial Process
919. No Clear Statement of Claims. Despite the fact that Parties 8 – 12 were required to participate in the Thakrar Litigation as defendants, and despite the fact that Party 4 stated in its opening statement that the court would be asked to make findings of dishonesty and deceit, including deliberate deceit of the court on the part of Parties 7 – 13, there is no document that those parties were able to identify which set out clearly and comprehensively the relief that was being sought against Parties 8 – 13 and which identified the party or parties who were seeking that relief.
920. This lack of clarity was said by Parties 8 – 13 to have been confirmed by the Composite Pleading served on 29 June 2006 that was settled by counsel for Party 4 This stated in paragraph 37 that certain relief was to be claimed against Parties 8 – 13, paragraph 35 recorded that:

"The precise relief sought will depend upon the facts found at the first stage of the trial".

This was in conformity with the two-stage process directed whereby the facts would be found in stage 1, the present trial, and the consequences in stage 2 at a later trial.

921. This two-stage procedure was contended by Parties 8 – 13 to be objectionable on a number of grounds including the following:

(1) It required Parties 8 – 13 to participate in a trial in circumstances where they neither knew nor could be expected to know the claims which would eventually be made against them.

(2) It required Parties 8 – 12 to present evidence taking into account not only those claims which have been formulated but claims which might be formulated by parties in the future depending upon the facts found at the first stage of the trial.

(3) It required Parties 8 – 12 to submit to cross-examination on matters relating to claims or potential claims of which they had received no advance notice. As an example of this, Mr. Pettican referred to the fact that Mukesh was cross-examined in relation to the HSBC client account operated by SKT, despite the fact that Mukesh had received no notice of any claims against him in respect of this matter.

922. No or no adequate disclosure. No disclosure in the conventional sense of standard disclosure by list took place. Parties 8 – 13 understood that the procedure which was adopted was that all parties simply provided access to all other parties who wished to inspect documents without any requirement that a search be conducted and a litigator sign a Standard Disclosure Statement. The consequences of this procedure were said to include the following:

(1) The absence of conventional disclosure had operated to the advantage of the Trustee and Party 4 and to the disadvantage of Parties 8 – 12 and other defendant parties. This was because there were literally thousands of documents in the possession of the Trustee which had either been seized by the Trustee in the exercise of her statutory powers or garnered from other sources and which were then deployed selectively by counsel for Party 4.

(2) Parties 8 – 13 were concerned that there might well have been documents favourable to their respective cases in the possession of the Trustee or other parties which, had they been available to their counsel, could have been deployed in cross-examination.

(3) A substantial number of documents only emerged during the course of the evidential hearings which would have emerged at a much earlier stage in the event that conventional disclosure had taken place. By way of example:

(i) On 7 July 2006, a file of original powers of attorney was produced to the court, but only after Vijaya's evidence had been completed.

(ii) Subsequently, 90 boxes of further documents were produced in Court from Decherts.

(iii) Thereafter, further boxes of documents were delivered to Court by Mr. Simon Clark.

923. The fact that such a substantial volume of additional documentation was produced for the first time during the course of the evidential hearings had a disproportionate impact on the defendant parties and operated to make the playing field even more unequal than would otherwise have been the case. The reason for this was that the Parties 1, 2 and 4 had between them the resources of three counsel and the services of three firms of solicitors and consequently had the resources to review these documents.
924. 4.2.4 Undue Hardship Caused to Parties 8 - 13
925. Ongoing disclosure requests were pursued by the Parties 1 and 4 in the course of the trial. These requests resulted in volumes of documents being added to the trial bundle as well as placing what Parties 8 – 13 regarded as intolerable burdens upon the defendant parties. For example, when Naina entered Court 73 for the purposes of giving her evidence, which was an extremely stressful experience, the first thing she was confronted with was a demand from Party 4 for copies of her bank statements relating to her personal account operated jointly with her husband. The position of Mukesh was particularly difficult in that he had been, as he saw the situation, subjected to an almost daily barrage of demands for the production of documents without any apparent regard for the impact that they were having on his ability to devote time to the preparation of his own case and to continue to earn a living.
926. 4.3 Findings - Parties 8 - 13's Submissions
927. 4.3.1 No Clear Statement of Claims
928. Contrary to the submissions advanced on behalf of Parties 8 – 13, there were several documents setting out the relief sought against Parties 8-13 and the parties seeking that relief. For example, Party 4's claim was set out in:

(1) Its application notice of 30 September 2005;

(2) The charging order applications;

(3) The composite pleading of Party 4 and Ramila dated 7 December 2005 to which Parties 8 – 13, whilst represented by Seddons, have pleaded without requesting further information; and

(4) The consolidating claim form in the Thakrar Litigation issued in 2006 under the title number HT-06-189.

929. Ramila's issued application and Vijaya's issued application both set out the relief respectively claimed by each of them. Those claims and that made by William's trustees were consolidated in the composite pleading set out in the consolidating claim form.
930. The issues have been summarised in procedural judgments given in October 2005 and November 2005. The potential significance of Ramila's evidence and the use to be made of that evidence was spelt out in terms by me for Parties 8 - 13 who were also even given advance notice of two key questions that would be asked of them. These questions were recited in a procedural judgment. Being then represented by the counsel who had represented Parties 8 - 13 at the 2003 trial and by Messrs Seddons, Parties 8-13 fully grasped what the claims were that were being advanced against them. This is clear given that counsel informed the court that Parties 8 - 13:

"… wish to participate fully in the further hearing and to adduce substantial evidence in an attempt to challenge and rebut the fresh evidence which largely comes from Ramila".

and that they also wished to make a cross-application.

931. A substantial body of evidence, in the form of 9 witness statements and a solicitor's letter together with a substantial exhibit of documents was prepared and, eventually, served on behalf of Parties 8 - 13. This documentation was represented as answering and explaining away much of the alleged dishonesty and deceit on the part of Parties 8 - 13. This documentation then required thorough testing by cross-examination. I am satisfied that Parties 8 - 13 knew precisely what the allegations made against them were and also what relief would be sought if the allegations were made out.
932. 4.3.2 Objectionable Procedure
933. As shown above, Parties 8 - 13, in common with all other defending parties in these proceedings, know from the various applications and pleadings precisely what claims are made against them. There was no question of the defendants:

"… participating in a trial where they do not know (and cannot know) the claims which will eventually be made against them".

934. As to the specific issue relating to the HSBC account, this is not a matter about which there could have been any advance warning from Parties 1, 2 and 4. The Trustee and other claiming parties had been seeking such disclosure and funding information in a conventional way and it became plain to those parties that Mukesh was intent upon not providing that disclosure and Mr Shelton had not taken any step to ensure that Glen could or would provide it. The truth as to the misuse of that account by Subhash and Mukesh in breach of the freezing injunctions and the complete indifference to those breaches and involvement in the management of that account by Mr Shelton led to the appointment of a court-appointed interim Receiver to protect that account. That was the only reason for the appointment of Party 1 as an interim Receiver, it was intended to be a short-term appointment but the conduct of Parties 7 – 14 and 18 unduly prolonged the trial thereafter.
935. What Parties 8 - 13 had to cross-examine upon was their own invented stories about the conduct of trial no. 1. Unsurprisingly, there was little that any cross-examiner could have found on which to mount a cross-examination of either Ramila or Vijaya given that neither patently had had anything to do with that trial from its inception until after judgment nos. 1 and 2.
936. 4.3.3 No or No Adequate Disclosure
937. Disclosure by list did not occur because Glen, in particular, was very resistant to giving any disclosure, and Mukesh, in keeping with the Thakrar Family practice in the 2003 trial, took the view that he would disclose only documents selected by Subhash and would otherwise deny the existence of documents. An example of such a denial related to the important Jeffries files.
938. Each party had an equal opportunity of inspecting the seized documents. The advantaged parties were in fact the Thakrar Family members and the other defending parties because, unlike the claiming parties, they knew full well what documents existed and which had been seized and therefore knew what, if anything, to look for.
939. The document that emerged during the questioning of Vijaya was not, as asserted by Party 8 – 13's submissions, "highly material" and it did nothing to advance the point Kiran was putting to Vijaya, namely that Vijaya, would sign anything for money and had made such an offer to Subhash.^[349] Kiran's line of questioning did, however, provide good insight into Subhash's malevolence and dishonesty directed towards Ramila and his misuse of her name.
940. Assimilation of the 96 Glen boxes finally and belatedly delivered by Decherts to the claiming parties disadvantaged the claiming parties and not the defending parties. Most of those documents comprised files that were obtained from 113 Woolwich High Street and their contents would have been very familiar to Mukesh and Vijay and, possibly, to Kishan. Subhash, of course, would have had an intimate knowledge of these files too.

16.4.3.4 No Funding

941. Parties 8 - 13 were thoroughly dishonest about their means and the source of funding for the Thakrar family actions. It was never clear that they could not fund their own representation as opposed, for tactical reasons, being unwilling to do so.
942. The claiming parties did adopt the same line in conducting their respective cases or, as was suggested by the submission, 'sing from the same hymn sheet'. That occurred because the claiming parties were in agreement on which parts of Parties 8 – 13 cases were dishonest and because the claiming parties wished to avoid any repetition or duplication of expression in an attempt to keep the length of the trial as short as possible. This consistency and economy of submission is not an advantage to the claiming parties but it assists the defending parties in limiting the range of focus for their attention.

16.4.3.5 No Level Playing Field

943. Throughout these proceedings, the court sought to be fair and to maintain a level playing field. Both I and two separate Lords Justices in separate applications for permission to appeal procedural rulings, namely Buxton LJ in November 2005 and Tuckey LJ in June 2006^[350][351], have fully considered whether Parties 8 - 13 might be unfairly or unjustly disadvantaged by any aspect of the hearing and each has held that there was no unfairness or slant on the playing field.

16.4.3.6 Unnecessary escalation of costs

944. The reason that costs have been and continue to be incurred at all, let alone at the rate they have been incurred was because Subhash in his role of superintending the cases of himself, Glen, Teso, Mr Harjivan and Parties 8-13, assisted by all those parties, persisted in lying to the court both directly and through the mouth of Mr Harjivan and, to a lesser extent, the other witnesses who gave evidence for the defending parties.

16.4.3.7 Conclusion

945. There was no basis for Parties 8 – 13's contentions that there had been an abuse of process grounds for the setting aside of the proceedings or for a recusal or for a new trial or for a re-trial.
946. 5 Subhash Submissions

16.5.1 Introduction

947. The grounds upon which Subhash contended that the proceedings were an abuse of process or that there should be a retrial, when distilled from the mass of documentation he has submitted, could be seen not merely to relate to his position as a party to the Thakrar Litigation. That position is as a potential residual claimant if it be held that he is the beneficial owner of Glen, if there remained thereafter a residual balance of assets after all claims had been met and if he was entitled to that balance notwithstanding the dishonest manner in which he had become and remained the beneficial owner of Glen.
948. As with everything else, Subhash could not refrain from showing that he considers himself to be the beneficial owner of Glen by putting forward contentions that could only avail Glen, if it was still contending for recusal. What I propose doing is listing each head of complaint and then making my findings about that head of complaint without addressing the procedural question as to whether, if the complaint were to be made out, whether it would enable Subhash to obtain relief for himself and, if so, what relief. Subhash's fire was principally directed to SPC as Party 2, no doubt because Party 2 has an outstanding judgment against him in excess of £5 million and is laying claim for the restitutionary return of over 100 properties in Glen's current portfolio. In consequence, Party 2 was the only party that addressed Subhash's complaints. I will therefore address those responses.

16.5.2 Summary of Subhash's Submissions and Findings

949. Jurisdiction. Subhash contended that the court, and certainly the Technology and Construction Court, had no jurisdiction to make findings of fact sought by Party 2, particularly in relation to its claim to set aside the compromise order and agreement reached in 2002.
950. The TCC, in this trial and by me as the trial judge plainly has jurisdiction to find the facts sought by Party 2 and in due course to grant the relief sought by Party 2 if it flows from those facts. A compromise agreement and Tomlin order may both be set aside on the grounds that they were procured by either fraud or fraudulent misrepresentation in a separate action. That is what Party 2 is claiming, in a separate action from the original Part 20 claim. There is in fact no serious or substantiated challenge to that position in Party 7's submissions on jurisdiction.
951. Unfair Trial. Subhash has complained in innumerable respects that the trial was unfair. Few of the grounds complained of relate to his position as a party to the Thakrar Litigation.
952. In relation to those grounds that affect Subhash personally, he is, in fact, in no position to submit that the trial has been unfair to him in circumstances where he has chosen not to give any evidence at the trial to support his case or to make any submissions or representations either personally or through counsel until after the record in this trial had been closed by invoking his then right to refuse to answer any questions on the grounds that these might incriminate him. Subhash's refusal was wholesale.
953. Subhash was due to be cross-examined for three days but, apart from confirming his name, and in the presence of senior junior counsel appearing for him on the questioning process, he made it clear that he would not answer any questions. I warned Subhash that if he maintained this stance, I would be bound to consider drawing adverse conclusions and he still maintained his silence. The claiming parties waived their right to require Subhash to make good his claim question by question. However, they submitted, correctly, that a party who refuses to answer any question in circumstances where, as here, there is so much for Subhash to provide answers to, should be considered by a court as one against whom it can and should draw adverse inferences where appropriate. Subhash sought to contend that he had only refused to give evidence because his counsel advised him to take that course. However, counsel would only advise taking such a wide-ranging right of silence if he had also advised that Subhash ran the risk of incriminating himself across the whole range of issues being tried. Subhash's conduct was suspicious in so many different circumstances that he effectively refused to engage in the trial at all and provided clear evidence that he considered that he could potentially incriminate himself across all the transactions being considered by the court in trial no. 2. Thus, Subhash has no effective standing to complain of unfairness when he declined to engage in the trial in these circumstances.
954. No clear statement of claims. Subhash maintained that the relief claimed by Party 2 and the basis upon which it is claimed were not clearly set out. A reading of pleadings and other court documents shows that that complaint is ill-founded. Party 2 has, at all material times, set out its case in its statement of case and in its written and oral submissions to the court.  Accordingly, all relevant defending parties have at all material times known or had the means of knowing what Party 2's case was that any of them had to meet.
955. No or no adequate disclosure. Subhash reiterated other parties' complaints about both inadequate discovery and about the discovery process. In fact, the only parties against whom this criticism could be validly made are Parties 14 and 15. These parties gave disclosure by the production of boxes of documents held at all material times by their solicitors, Decherts but only at a very late stage, mid-way through the trial. Moreover, Mukesh, apparently on Subhash's instructions, deliberately sought to thwart disclosure by removing documents from Party 14's solicitors and hiding them at SKTL's offices.
956. Funding Issues. Subhash chose not to participate in the proceedings and accordingly made no applications for funding from Glen. There are no relevant funding issues that affect Party 7.
957. No level playing field. Subhash complained bitterly that the playing field was not level but, for him, this argument is unsustainable, even if Subhash could make out the factual basis of his complaints which he would have been unable to do. The argument does not run for Party 7 because:

(1) After obtaining legal advice, Party 7 chose not to participate in the proceedings; and

(2) Party 7 has at all material times had access to legal advice and representation, through Mr Robin Howard of counsel, whenever he has felt the need for it. 

958. The allegation that the court should have ordered Ramila and Vijaya to be represented by "other independent" solicitors is fanciful and disingenuous.  It was plain from the evidence given by Ramila and Vijaya that they did not have the means to fund representation.  There was no evidence before the Court that either of them had "substantial savings and legal funding".  The only reason Ramila still has her property is because she came to Court in 2005 to expose the fraud that had been perpetrated on her, her sister, the court and Parties 2 - 4 by Subhash and his siblings in the course of the earlier proceedings. Furthermore, Party 4's solicitors did not act for and were not retained by either Ramila or Vijaya.  The latter have acted throughout the trial by their next friend and McKenzie friend, their brother Mr Shimeer Thakrar.
959. Other matters. Complaint is made that the court appointed an interim Receiver to prevent serious breaches of the interim injunctions and to prevent Glen continuing to endanger property the claiming parties were laying claim to. The proposed decision to appoint an interim Receiver was made on notice and supported by evidence and the hearing was attended by leading counsel for Glen.  No appeal was made by Glen from the order appointing the interim Receiver nor did it apply on notice to vary or discharge the order appointing the interim Receiver as it had the right to do if so advised.
960. In general, Party 7's submissions entirely lack the particularity required to support a submission that the Judge should recuse himself or that the conduct or trial of the proceedings have been unfair.  Further, so far as particularized, they are entirely devoid of substantiation or merit.
961. To the extent that Party 7 seeks once again to use submissions as a device to give the evidence he chose not to give at trial, the Court should reject the same as an abuse of process.  Party 2 invites the Court to proceed with its judgment on the fact-finding trial on the basis of the evidence presented to it at trial, which has been closely analysed by Party 2 in its closing written submissions.  The Court will be aware of the fact that Party 7 has not even attempted to provide a reasoned challenge to Party 2's analysis of the evidence.
962. Conclusion. Party 2 invited the court to find that Party 7's readiness to speak interchangeably on behalf of Glen, Teso, Harjivan and the Family members is itself indicative of the fact that he regards the same merely as projections of himself. I do readily make that deduction, in the light of the nature, range and intrusiveness of Subhash's submissions.
963. Errors in Subhash's submissions. Subhash made a number of wild accusations or assertions in his recusal submissions which were wholly unsupported by any evidence led or produced at the trial of the fact finding hearing. These accusations were further indications of Subhash's blindness to the wholesale fraud he has perpetrated over many years. Particular examples of this blindness that occurred in the submissions were as follows:

(1) Party 2 was said to have sought relief using Ramila and/or Vijaya as what Subhash described as Party 2's "new vehicle".   Neither Ramila nor Vijaya is the "vehicle" of Party 2.  Ramila and Vijaya are independent parties in their own right.  Party 2 did, however, rely on the evidence given by Ramila and Vijaya as witnesses at the fact-finding trial in support of the findings of fact it is inviting me to make.

(2) Party 2 did not seek any relief against Parties 8 – 13 although this is alleged by Subhash.  Party 2 does seek relief against Subhash arising out of his fraud and misrepresentations during the course of the previous proceedings.

(3) Party 2 has never sought, obtained or received funding from the Solicitors Indemnity Fund despite Subhash's assertion to the contrary.

(4) Party 2's claims against Subhash that were the subject of the previous proceedings are neither "potential" nor "disputed" as they were surprisingly described by Subhash. These claims are the subject of final judgments in Party 2's favour in sums that total well in excess of £5 million.

(5) Party 2's case is and has always been that Subhash has no valid claim for contribution against it. The Trustee, Party 1, has on advice come to the same view and I have so held in this judgment. Thus, Party 1's view was reasonable and was not, as suggested by Subhash, reached for improper motives.

964. Subhash maintained that Party 2 "merely alleged that it was a creditor in his bankruptcy. In fact, relying on the judgment debt in its favour, it not merely alleges that it is a creditor, it is in fact the major creditor in Subhash's bankruptcy.
965. Subhash continues to exist in a state of denial about the fact that Party 2 has significant judgments for sums in excess against him that exceed £5 million in total. He continues to assert that he does not owe Party 2 anything. This attitude further undermines Subhash's case generally.
966. Subhash seeks to blame the claiming parties for the fact that his bankruptcy has not yet been annulled. He asserted that he had given full, frank and honest disclosure of his assets to his Trustee and that in consequence his bankruptcy should have been annulled by now. However, Party 2 has not been paid yet.  The fact that this has not happened is because Subhash has attempted to conceal his assets behind the thin façade of a Liberian company in Glen, in fictitious charges in favour of a shell company in Teso and a nominee shareholder in Mr Harjivan.
967. 5.3 Findings - Subhash's Complaints
968. Subhash has no valid complaint about the conduct of the trial or in relation to any possible abuse of process. He has no grounds to call for my recusal. The nature and extent of his complaints, particularly in asserting that Party 2 has no outstanding liability, claim or indebtedness against him or Glen is further indication of his complete lack of insight into the nature or extent of his dishonesty over many years.

17 Outstanding Questions

969. The principal outstanding questions that need to be resolved in the consequences trial are:

(1) Are Ramila and Vijaya entitled to have the judgments entered against them set aside?

(2) Do Ramila and Vijaya have any claim for relief against Subhash for the misuse of their powers of attorney or for breach of fiduciary duty or for the misuse of their names and for the stress that Subhash's actions have imposed on them?

(3) What remedies in restitution, equitable tracing or otherwise does William's Estate have and against whom? Which if any of these claims are barred by laches or limitation?

(4) Is SPC bound by the compromise and Tomlin order from making claims against Glen?

(5) What properties may SPC make claims in relation to and what are the nature of the claims may it make? In particular, what restitutionary and equitable tracing claims does it have and what claims for damages or interest does it have? Are any claims capable of being expressed as claims for compound interest and, if so, which and how calculated?

(6) How should any outstanding claims inter-relate with the judgment sum? Has any claimed been waived by virtue of the doctrine of waiver of tort or otherwise by virtue of the monetary judgment in SPC's favour?

(7) Are any of SPC's claims barred by laches or limitation?

(8) Which parties have claims under section 51 of the Supreme Court Act 1981 against which parties and in what amount?

(9) May the court direct that Glen's shares and Teso's shares be transferred to the Trustee and does it have jurisdiction over a Liberian company whose principal office is located in Jersey? What relief is the Trustee entitled to and against whom?

(10) What procedural remedy, if any, is Party 2 entitled to in relation to the findings relating to trial no. 1 and the abuse of process that there occurred?

(11) What order should the court make on Party 1 and Party 4's paragraph 81 application and party 14's cross-application?

(12) Should the court refer this judgment to the police or prosecuting authorities or to any professional disciplinary proceedings and if so to whom and in relation to which parties and what matters?

(13) Which findings of fact should the court make and record as a judgment by way of declaration or otherwise?

(14) Do Parties 8 – 13 wish to pursue their claims for an account against Subhash and if so, what claims do they have?

(15) Does Subhash have any outstanding claims for contributory negligence or contribution that may still be pursued and, if so, who is to pursue what claims against whom?

(16) Does Mr Harjivan have any claims he wishes to pursue against Subhash in fraud, deceit, breach of fiduciary duty or for an account? If so what claims? Are they barred by laches or limitation?

18. Note of Subsequent Events

970. In consequence of this Judgment No. 5 I made orders over the period 10-12 October 2007 and subsequently. Further on 11 July 2008 I was informed that all issues in the Thakrar Litigation as between each and all of Parties 1 – 6 and Glen and Teso had been settled and were the subject of a compromise agreement. I made an order by consent including a schedule in Tomlin order form containing the terms of compromise. I was asked by Party 1 (as trustee in bankruptcy of Subhash and receiver and manager of Glen and Teso) to approve the terms of compromise and I did so. Further, on 14 July 2008 I accepted undertakings from Parties 8 – 13 and made an order by consent including a schedule in Tomlin order form providing for resolution of all disputes and issues between Parties 1 – 6 and each of them and Parties 8 – 13 and 17 and each of them. Further on [date] I made an order by consent of the joint administrators, Parties 1, 2 and 4, and Glen, including a schedule in Tomlin order form providing for resolution of all outstanding disputes and issues between Parties 1, 2 and 4 and each of them and the joint administrators.
971. By reason of the orders and agreements referred to in the preceding paragraph, in broad terms (and without prejudice to the confidentiality of the terms of such agreements) the outcome of the Thakrar Litigation (by reference to the groups of proceedings I identified in paragraph 11 above) is as follows:

(1) the claims and applications made to enforce, directly or indirectly, money and costs judgments that were entered in favour of Party 2 (and Kenneth and Rosemary) and Party 4 following trial no. 1 have been settled in part;

(2) the application or claim by SPC to set aside a compromise agreement of its claims against Glen and Ramila in the earlier litigation on the ground that such agreement was procured fraudulently was compromised as part of its overall terms of compromise with Parties 1 and 3 – 6, Glen and Teso;

(3) the applications by Ramila and Vijaya to set aside default judgments that had been entered against them in favour of Party 4 in the earlier litigation were granted on the ground that the proceedings which led to the default judgments being entered, although brought in their names, were in fact commenced and conducted by Subhash without their knowledge or approval, and were abuses of the process of the court;

(4) the restitutionary and tracing claims advanced by SPC against Glen, Ramila and Vijaya were compromised as part of its overall terms of compromise with Parties 1 and 3 – 6, Glen and Teso, and the restitutionary and tracing claims advanced by Party 3 against Parties 8 – 13, Glen and Vijaya were compromised as part of its overall terms of compromise with Parties 1, 2 and 4-6, Glen and Teso, and with Parties 8-13;

(5) the applications made by all the defending Parties for my recusal or to set aside, stay or put an end to the current proceedings were withdrawn, abandoned or denied;

(6) I declared that the purported out of court appointment of the joint administrators of Glen on 13 April 2007 was invalid and further or alternatively that it was made for an improper motive on the part of Party 20;

(7) by reason of the orders and agreements referred to there will be no need for a further consequences trial to take place.