Khambay & Anor v Nijhar (t/a Gravitas Consulting), Court of Appeal - Queen's Bench Division, February 06, 2015, [2015] EWHC 190 (QB)

Resolution Date:February 06, 2015
Issuing Organization:Queen's Bench Division
Actores:Khambay & Anor v Nijhar (t/a Gravitas Consulting)

Case No: HQ10X04893

Neutral Citation Number: [2015] EWHC 190 (QB)



Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 6 February 2015



(sitting as a Deputy Judge of the High Court)

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Daniel Goodkin (instructed by Flint Bishop LLP) for the Claimants.

Ian Mason instructed on a Direct Professional Access basis by the Defendant.

Hearing dates: 5, 6, 7, 10 and 11 November and 5 December 2014, with further written submissions on 12 and 19 December 2014

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  1. This dispute arises out of a property development which did not achieve what had been hoped for it. That much is common ground between the parties, although not much else is. On the contrary, this is a case in which there are a substantial number of hotly contested issues, not least whether the Defendant (``Mr Nijhar'') committed the tort of deceit, as alleged by the Claimants.

  2. The First Claimant (``Dr Khambay''), who is a dentist but who is also somebody who has a certain amount of experience in developing properties, alleges that Mr Nijhar, whose main experience is in the housing association sector, presented himself (to Dr Khambay) as an experienced and very well-connected property professional and induced him (Dr Khambay) to purchase the former site of the Duncan Edwards Public House, Priory Road, Dudley DY1 4EH (the ``Site'') by representing that he (Mr Nijhar) had received assurances from (i) local planning officers in Dudley that planning permission would be granted quickly for mixed retail and residential use with a supermarket development of at least medium size, and (ii) from housing associations and retailers that they would purchase the Site. Dr Khambay also alleges that Mr Nijhar guaranteed Dr Khambay that a profit of at least £500,000 would be achieved if the Site was purchased and planning permission obtained.

  3. It is Dr Khambay's case, and the case of the Second Claimant (``Clubhire''), a company owned by Dr Khambay, that these representations were false, and that Mr Nijhar is liable in the tort of deceit or on the basis that there is actionable negligent misrepresentation/misstatement or for breach of an alleged collateral contract. Dr Khambay and Clubhire say that they were induced by what Mr Nijhar said to purchase the Site for £875,000 on 10 August 2006 - the purchase being through Clubhire rather than by Dr Khambay in his personal capacity. They contend that Mr Nijhar wanted the Site to be purchased in order that he would be appointed to oversee its development and onward sale either for a profit share or for a lump sum payment of £129,500.

  4. Mr Nijhar was, indeed, appointed - or, more accurately, his newly incorporated company, Gravitas Consultancy Limited (``Gravitas'') was appointed - by Dr Khambay as `project manager'. In that capacity Mr Nijhar and Gravitas earned substantial sums of money. In particular, and this is the other aspect of Dr Khambay's and Clubhire's case, despite planning permission not being obtained and the Site not being sold, the allegation is that, having omitted to tell Dr Khambay/Clubhire that a planning scheme submitted in early 2007 had been rejected by Dudley Metropolitan Borough Council (the ``Council''), Mr Nijhar made certain misrepresentations on 14 August 2007 which caused Dr Khambay to authorise an additional payment to Gravitas in the sum of £34,042.55 (exclusive of VAT) on 17 August 2007. The Claimants' case is that these representations were also made deceitfully and that Mr Nijhar is liable accordingly.

  5. Mr Nijhar denies each of the Claimants' allegations. His case is straightforward. It is, essentially, to deny that he made the statements which he is alleged to have made, and to maintain that as regards what he did say there was no falsity as alleged. Mr Nijhar denies also that he guaranteed a profit of £500,000 at any time. Again, he says that this was discussed merely as a possibility. He adds that, in any event, in the economic circumstances which prevailed in 2006, two years ahead of the global economic downturn, it was a reasonable opinion to hold - indeed, it was an opinion which (as appears below) was shared by an experienced property developer, Mr Amar Mehli. Further, Mr Mason submitted on Mr Nijhar's behalf, nobody in Dr Khambay's position, with experience in property development, would have understood him to be giving the guarantee now alleged. As a result, the case on inducement cannot hope to succeed. The more so, Mr Nijhar contends, given that Dr Khambay (and Clubhire) relied not on him, or not exclusively on him, but on various other professionals in the form of Mr Mehli (who brought the opportunity to Dr Khambay in the first place and who is an experienced property professional), Mr Surbit Khurll (the director of a company providing commercial property sales and agency services) and Mr Vinay Lakhani (who was Dr Khambay's long-term accountant) throughout the negotiations and subsequent project management.

  6. Mr Nijhar's position is that, as he puts it, ``the real difficulty'' in the present case resulted from the unexpected economic downturn in 2008 and the ``dramatic'' effect which that downturn had on the property market. He maintains that, throughout the relevant period, he continued to pursue the possibilities for the Site with ``all proper diligence and competence'', spending more than the 110 days originally planned on the project. In this context, he firmly rejects the allegation that the £34,042.55 (exclusive of VAT) payment made on 17 August 2007 was made only because he had misrepresented to Dr Khambay and Clubhire the progress which had been made by Gravitas in relation to the Site.

    The witnesses

  7. It will be apparent from the nature of the issues which arise in this case that determination of those issues depends very largely, perhaps even exclusively, on my assessment of the witnesses who gave evidence before me. Put shortly, I have to decide whether representations were made; if they were, whether they were made deceitfully or negligently; and if that is the case, whether the Claimants' case on inducement has been made out. Each of these matters will turn on the quality of the evidence given by the witnesses, and that depends, in turn, on the witnesses' credibility - primarily that of the main protagonists, Dr Khambay and Mr Nijhar, neither of whom I found impressive as witnesses.

    Dr Khambay

  8. I start with Dr Khambay. He is, as I have already mentioned, a professional man, a dentist. He is also, it would appear, a successful businessman, not only as the owner of apparently busy dental practices but additionally as the developer of certain commercial ventures, namely pubs and clubs, and as the owner of property on the Continent, in particular in Turkey. It would, in such circumstances, be wrong to regard him as inexperienced in property matters, and I do not do this. I accept nonetheless that it would equally be wrong to approach him, and the evidence which he gave, on the basis that he was experienced in developing property similar in size or scale to the Site. I accept his evidence that this was his first venture into the type of development represented by the Site. I accept also that Dr Khambay's practice is to obtain advice from property professionals whenever he was dealing with property development projects. This was what Dr Khambay himself said in evidence. It is also what Mr Khurll had to say based on his experience of working with Dr Khambay on various property deals. It is further borne out by what happened in the present case, with Mr Mehli and Mr Nijhar both involved in the Site at the beginning and then, after Mr Mehli dropped out, Mr Nijhar, or his company, Gravitas, employed as a property consultant.

  9. Dr Khambay's abilities were evident to me when he gave evidence; he is undoubtedly an able man. Unfortunately, however, it was also apparent to me that he was astute to the need to ensure that the evidence which he gave did not harm the case which he and Clubhire were advancing against Mr Nijhar. I am also clear that, whilst he was not setting out to mislead in the evidence which he gave, nonetheless he did engage in what has been termed in the past as `litigation wishful thinking' (see Tamlura NV v. CMS Cameron McKenna [2009] EWHC 538, [2009] Lloyd's Rep PN 71 per Mann J at [174]). Dr Khambay, in other words, has convinced himself, especially given the passage of time which there has been since the relevant events, that his recollection is in all respects the truth, when that is not the case. He was also grudging in quite a few of his answers to perfectly reasonable questions. This was accentuated by his seeming unwillingness to speak up when giving his evidence, despite several requests that he do so because of the difficulty I sometimes had in hearing what he was saying. In these circumstances, I approach Dr Khambay's evidence with some degree of care and ideally looking for independent support for what he had to say, whether from other witnesses or in the contemporaneous documents. However, I do not consider it appropriate to adopt the course suggested by Mr Mason, which was to place no trust in the evidence given by Dr Khambay. On the contrary, I felt that, in broad terms at least, Dr Khambay was striving to give evidence which was truthful and reliable. Nonetheless, it does not follow that I should uncritically accept everything he told me since I am conscious that, like the other witnesses, he was relating events which took place a long time ago (mainly about 8 years ago). I also am alive, as I say, to the likelihood that, in giving his evidence, Dr Khambay was at pains to ensure that he said nothing which...

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