Takhar v Gracefield Developments Ltd & Ors

Hilary Term

[2019] UKSC 13

On appeal from: [2017] EWCA Civ 147

JUDGMENT

lord kerr: (with whom Lord Hodge, Lord Lloyd-Jones and Lord Kitchin agree)

Introduction

1.                  Balber Kaur Takhar, the appellant, is the cousin of the third respondent, Parkash Kaur Krishan. For many years before 2004, they had not seen each other. In that year they became reacquainted. At the time, Mrs Takhar was suffering personal and financial problems. She had separated from her husband some five years previously. As part of the arrangements made between Mrs Takhar and her husband, she had acquired a number of properties in Coventry.

2.                  When Mrs Takhar and Mrs Krishan met again, according to Mrs Takhar, she confided in her cousin and grew increasingly to depend upon her. Mrs Takhar claims that Mrs Krishan exerted considerable influence over her.

3.                  The financial problems of Mrs Takhar arose mainly from the condition of the properties which she had acquired from her husband. Some were in a dilapidated condition. Payment for rates were in arrears. Bankruptcy for Mrs Takhar was in prospect.

4.                  The Krishans provided financial help to Mrs Takhar. Dr Krishan, the second respondent and the third respondent’s husband, took on responsibility for negotiating with Coventry City Council over the rates arrears and the dilapidated state of some of the buildings. Then, in November 2005 it was agreed that the legal title to the properties would be transferred to Gracefield Developments Ltd, a newly formed company, of which Mrs Takhar and the Krishans were to be the shareholders and directors.

5.                  Mrs Takhar claims that it had been agreed between her and the Krishans that the properties would be renovated and then let. The rent would be used to defray the cost of the renovation, which, in the short term, would be met by the Krishans. Mrs Takhar would remain the beneficial owner of the properties.

6.                  The Krishans present a very different account. They claim that Gracefield was set up as a joint venture company. The properties were to be sold after they had been renovated. They were to be given an agreed value and this would be paid to Mrs Takhar after they had been sold. Any profit over would be divided equally between Mrs Takhar and the Krishans. They explain that Mrs Takhar agreed to these arrangements because planning permission for development had to be obtained in order to realise the value of the properties and this was an area in which Dr Krishan had experience, having already successfully developed his own medical centre.

The proceedings

7.                  On 24 October 2008, Mrs Takhar, issued proceedings in the Birmingham District…