HT-2023-BHM-000003 - [2024] EWHC 1089 (TCC)

The Defendant’s case is that Mr Dhanda did not sign the contract on which the Claimant relies. The Defendant has not pleaded that, if it was signed by Mr Dhanda, he did not have ostensible authority to do so. The Defendant accepts that, if the contract was signed by Mr Dhanda, it is binding on it, subject to the question of whether the Contract was conditional. The simple issue before me therefore is whether Mr Dhanda signed the Contract.

The Claimant relies on the executed agreement, the witness evidence of Mr Matharu and the witness evidence of Mr Farmah, both of whom gave evidence that Mr Dhanda signed the agreement in their presence in a pub in Lichfield called The Pig (later confirmed to be the Pig and Truffle) on 19 August 2016. The Claimant also relies on the contemporaneous documents which it contends are consistent with the Contract having been executed by the Defendant.

The Defendant relies on the evidence of Mr Dhanda that he did not sign the Contract. It relies on the fact that Mr Dhanda was not a director of the Defendant at the time and the evidence of its witnesses was that its practice was for contracts to be executed by directors, and therefore Mr Dhanda would not have signed the Contract.

Mr Matharu gave clear evidence that the Contract had been signed in his presence and that Mr Farmah had acted as witness to the signature. Mr Farmah's evidence was that he had travelled to the pub which he believed was called The Pig for a social drink with Mr Matharu, who was both a personal friend and a business associate of his. His evidence was that Mr Matharu drove him to the pub and that, at that time, he had not been aware that he would be asked to witness the execution of a document but that, when he was at the pub, he was asked to witness the signature of the Contract. His evidence was that Mr Dhanda was not known to him at the time but that he recognised him in court as the person who had signed the document. Both Mr Matharu and Mr Farmah gave consistent evidence on this issue.

Mr Dhanda’s evidence was that he had never signed the agreement. In his witness statement, he stated that, at a meeting at the Belfry Golf Club on 14 March 2017, “Ubhi produced the JCT Contract which they had (sic) now attached to their Particulars of Claim dated August 2016. They claimed that they had already entered into a contract with us and we were obliged to proceed. I was astonished. I never signed a JCT Contract with Ubhi. I was not a director or shareholder of Ubi at the time this contract was alleged to have been signed in August 2016. I did not sign documents for that reason.”

On 2 September 2016, a couple of weeks after the date on which the Claimant alleges Mr Dhanda signed the JCT contract, Mr Matharu emailed Mr Dhanda as follows:

From that, it is clear that, as at 2September 2016, which was a couple of weeks after the date on the Contract, the Claimant had recently started work on site and had brought in facilities.

In response that same day, Mr Dhanda sent an e-mail to Mr Matharu as follows:

This email is clearly inconsistent with his evidence that he never signed the Contract and the only contract was an oral contract for clearing the site for £30,000. It expressly refers “signing up the contract”. It states that it “protects both parties”. It is clear from the fact that his email was sent in response to Mr Matharu’s email seeking payment because they were now on site that he meant to reassure Mr Matharu that the contract that had been signed would protect the Claimant in relation to its costs, and that he hoped the finance would soon be approved. It is impossible to read that email as anything other than the Defendant’s reassurance to the Claimant that it would be paid and that it had the protection of the contract that had been signed up.

The Claimant had pleaded that the email was clearly inconsistent with the Defendant’s case. It is therefore particularly surprising that Mr Dhanda did not address this document in his witness statement. In cross examination, he said that he had been on holiday at the time he had sent it and had been relaxing, and was not in work mode, and that that it was an error. I find it very difficult to understand why, however relaxed he might have been on holiday, he would make the mistake of thinking that a contract had been signed that had not been, or that its existence would reassure and protect the Claimant, which was clearly concerned it had not been paid. It is not the sort of error that is easy to make.

On 4 November 2016, Mr Matharu sent a PDF document to Mr Dhanda by email. 14 minutes later, Mr Dhanda forwarded that message to Mrs Cooper under cover any of an e-mail stating “Hi Vikki Attached is the JCT contract”. Mr Dhanda’s oral evidence was that he had not forwarded the signed JCT contract to Mrs Cooper but had sent her a blank JCT contract. He stated that he had not had an e-mail from Mr Matharu or Mrs Cooper with a signed contract.

On 4 November 2016, Mrs Cooper emailed Mr Matharu as follows:

It is of note that Mrs Cooper refers to “the Contract”. From this, it appears she was under the impression (presumably from Mr Dhanda) that the document sent by Mr Dhanda that she had been unable to open was a contract, not a blank JCT form, as alleged by Mr Dhanda.

Although the PDF attachment had not been included in the bundle, it was available in electronic form and had been disclosed by both parties. As Mr Dhanda was forced to accept when it was shown to him, the attachment to it was the signed Contract on which the Claimant relies. In re-examination, he was asked whether he had opened the attachment. He responded that he did not recall opening it. However, there was a 14 minute delay between receipt of the e-mail and forwarding it to Mrs Cooper. In addition, no explanation was offered as to why it would be necessary to send a blank JCT contract to Mrs Cooper, a Quantity Surveyor advising a funder on a development project, who clearly had ample experience of construction contracts. It is clear that the purpose of sending her the Contract was so she could consider its terms. A blank JCT contract would have been of no use to her.

On 13 December 2016, Mrs Cooper emailed Mr Dhanda (among others) in the following terms:

It is clear from this that Mrs Cooper had seen an executed contract, that she understood it to bind the parties and that she considered that, if it was to be replaced with one in more suitable terms for her client funder, the existing contract would need to be terminated.

On 22 December 2016, Mr Dhanda emailed Mrs Cooper in the following terms:

In that document, Mr Dhanda referred to the Defendant as the contractor, not one of several possible contractors.

Despite the overwhelming contemporaneous documentation supporting the existence of an executed contract, Mr Dhanda maintained his position in his oral evidence that he had not signed the Contract and that it had been a shock to him in on 14 March 2017 when the Claimant had claimed that such a contract existed.

The Defendant’s witnesses gave evidence that Mr Dhanda could not have signed the JCT contract because he was not a director or shareholder of the Defendant at the time the Contract was alleged to have been signed.

Mr Bajwa’s witness statement stated “I work with my co-directors Bob [Mr Dhanda] and Dave [Mr Singh] in this company….. I have read the statements of Bob and Dave and I agree with the statements they have made. Bob has provided a detailed statement. To avoid repetition, I do not repeat his statement here save to state that the statement is accurate.”

Mr Singh’s statement contained the following:

In his witness statement, Mr Dhanda said “I am currently Director and Shareholder of Aspire (UK) Enterprises. However, at the time of the alleged contractual relationship between the Claimant and the Defendant in 2016, I was not a Director or Shareholder. The relevance of my position as a non-Director is relevant, which I will deal with in due course.”

He also said that, at the time of the initial discussions with the Claimant in respect of the Willenhall project “At this point, I specify that I was not, yet a director and shareholder in Aspire. I had had a minor difficulty with a CCJ in my name which stopped me from being formally involved at that time. I was a shareholder and informally involved but, as I was not a director. I did not have a formal involvement which meant that I was not entitled to on behalf of Aspire (sic) and, importantly, was not authorised by Aspire or the financiers to sign any contract on behalf of Aspire. I didn’t sign these types of documents at that time.”

Mr Dhanda’s evidence that he would not have signed the Contract because he was not a director of the Defendant is inconsistent with his having signed the Ironbridge Contract between Millennium and the Claimant. Mr Dhanda accepted that he signed the Ironbridge Contract despite not being a director of Millenium at the time, having resigned a few days earlier. His evidence was that he was authorised to sign the Ironbridge Contract despite not being a director of Millenium because he had a substantial financial interest in Millenium.

When he gave evidence in chief, before confirming the truth of his witness statement, Mr Dhanda corrected his witness statement. He stated that his witness statement was incorrect, that he was not a current director and that he had never been a director of the Defendant. He also said he was not a shareholder and had never been a shareholder of the Defendant. He confirmed the truth of his witness statement subject to those corrections. His evidence was that his position in relation to Millenium (of which he was a substantial shareholder) was different from his position in relation to the Defendant, of which he was, according to his oral evidence, never a shareholder and was merely an employee.

On 30 January 2024, which was the last day of trial, the Defendant’s witnesses having finished giving evidence on 29 January 2024, the Claimant became aware of filings at Companies House on behalf of the Defendant. Companies House records show filings on 29 January 2024 stating that, on 16 January 2024, Mr Dhanda had transferred 34 shares (being one third of the issued share capital of the Defendant) to Mrs Gill at the same time as Mr Bajwa had transferred 34 shares to her. At the same time, Mr Bajwa had resigned as a director leaving Mrs Gill as the sole director and shareholder of the Defendant, holding the entire issued share capital of 104 shares.

The Defendant submitted through counsel that its accountant would be able to confirm by letter that the reference to 16 January 2024 was a mistake and that the transactions had actually occurred on 29 January 2024. Although the Claimant did not accept that explanation, to avoid the need for an adjournment, the costs of which would be disproportionate to the importance of the issue, it was agreed that I would not be asked to make any finding that the transactions had actually occurred on 16 January 2024 rather than 29 January 2024. I proceed therefore on the basis that the transactions recorded at Companies House as having occurred on 16 January 2024 actually occurred on 29 January 2024.

At counsel’s invitation, I have checked the records at Companies house as the documents made available are not complete. Those records show:

In the light of the clear contradiction between the documents filed at Companies House and Mr Dhanda’s oral evidence that he had never been a shareholder of the Defendant, Mr Dhanda was recalled to give further evidence. He gave oral evidence that he believed he was not a shareholder in the Defendant and that he had been instructed to deal with the planning application and the day-to-day running of the Defendant. He said he had learned he was a shareholder the previous day (ie on 29 January 2024) when Mr Bajwa had phoned his accountant and “it came out” that he had a shareholding. No explanation was provided as to why Mr Bajwa phoned his accountant, or why these transactions should have occurred immediately after the Defendant’s witnesses had concluded their evidence.

Mr Dandha said it had not dawned on him when he learned he was a shareholder that he should correct the oral evidence he had recently given in court that it had come as a shock to him to learn he was a shareholder. When asked what consideration he had received or would receive for the transfer of the shares to Mrs Gill, he said he had no idea. He was asked why he had not thought to ask Mr Bajwa how why he was recorded as a shareholder if he was not one. He said that it was a shock and he had yet to have a conversation with Mr Bajwa to find out why he was a shareholder of the company, and that he had not had an opportunity to do so because, after the court case had finished the previous day, Mr Bajwa had had a pressing engagement and so had Mr Dhanda.

He was asked why he had transferred the shares to Mrs Gill the previous day. He replied that he had never had an interest in the Defendant, that his role was to be employed to oversee the planning deal with contractors etc. He gave no explanation as to why there was sufficient time yesterday, despite pressing engagements, to deal with the transfer of his shares in the Defendant to Mrs Gill but had no time to discuss how it had come about that he was a shareholder.

It was put to him that he had no proof that he was ever employed by the Defendant, to which he responded that he was authorised by the directors and that that was an instruction and employment. It was put to him that when the company was incorporated, he was an equal shareholder with Mr Bajwa. He said he did not know that. When he was asked whether he had been unaware that he had owned half the company, he said it was eight or nine years ago and he did not remember.

I asked Mr Dandha why, if he believed he had no financial interest in the company, he had spent his own money funding the project, as the documents showed he had. He said it was because he loaned money to Mr Bajwa and Mrs Gill. He said that he had not been paid a salary but that there was an agreement that, when the company made profits, he would be paid £60,000 for overseeing the development. Despite accepting that he was the person responsible for overseeing the development and accepting that he dealt with the sale of the properties at the end of the development, including dealing with the estate agents, he said was not privy to the company's accounts and did not know whether the development had been profitable.

I did not find any part of Mr Dhanda’s evidence on this issue to be credible. He was recorded as a 50% shareholder when the Defendant was formed, when he was the Company Secretary. The records show his shareholding has varied over time, including by reducing his shareholding to one third, then to nil, and then reverting to one third. It is not clear when he resumed ownership of one third of the Defendant, but it was before 5 February 2019, according to the filings at Companies House. Given the Defendant’s position is that the transactions recorded on 29 January 2024 did not occur until that date, he must have been a one third shareholder at a time when his sworn evidence was that he was not, and never had been, a shareholder.

An email dated 2 September 2016 from Mr Dhanda to Mr Matharu stated he had used his personal funds to pay M&J (which I understand was a contractor involved in groundwork on the site). That is consistent with his holding a financial interest in the Defendant.

Mr Dhanda is recorded as a director or former director of several companies. He is clearly an experienced developer. Mr Bajwa and Mr Singh gave evidence that they relied on his expertise to run the project. It is also clear that they were far less familiar with the details of the project than Mr Dhanda. I do not find it credible that Mr Dhanda ran a multi-million pound development and injected his own personal funds into it by paying contractors on the basis that he was only to receive a profit share of £60,000. The alleged profit share arrangement was not mentioned in any of the witness statements. There were no documents in the trial bundle evidencing such an arrangement. If he had been working for a profit share, given he ran the entire project (including dealing with planning, the contractors, negotiating contracts and dealing with the sale of the properties), I consider it is extremely unlikely that he would not know whether the development had been profitable and whether he was entitled to his £60,000 payment long after it was completed.

I find that, whether or not he was recorded at all times as a shareholder at Companies House, Mr Dhanda had a financial interest in the Defendant company at the material times. I do not accept that he did not know he was a shareholder in the Defendant until after he had given his evidence. I find he knew he was and had been a shareholder of the company, as he had originally said in his witness statement and as Mr Bajwa and Mr Singh had confirmed in their witness statements, and that his assertion that he had never been a shareholder was made in an attempt to distinguish his ability to sign the Ironbridge Contract for Millenium and his alleged inability to sign the Contract for the Defendant, on the basis he had a financial interest in Millenium but no financial interest in the Defendant.

I note also that, on 2 March 2017, Mr Dhanda emailed Mr Matharu to ask “please provide a full break down of all outstanding costs and invoices so I may sit down with the other Directors.” At that time, Mr Dhanda was clearly describing himself as a director.

Mr Dhanda, Mr Bajwa and Mr Singh all agreed that Mr Dhanda dealt with the project. There is no doubt that he dealt with negotiations with contractors, including the Claimant.

At the CCMC in this case, there was discussion about the need for expert evidence from a handwriting expert, given Mr Dhanda’s denial that the signature was his. At the time the Defendant obtained permission to re-amend the Defence to clarify its position with regard to the question of whether it alleged the signature was fraudulent, the parties were granted permission for expert handwriting evidence in the event that the Defendant did plead the signature was fraudulent. Although the word “fraud” is not used in the Re-Amended Defence, it does make clear that it is denied that the signature was Mr Dhanda’s. No expert evidence was filed to support this contention. Mr Dhanda sought to explain this in his witness statement. He stated that he had considered obtaining an expert’s advice to analyse his signature to prove the signature was not his but he had been advised that an expert would need to analyse “many many original documents” that bore his signature on or around 2016 and that he was “unable to find hardly any original documents (sic) so decided there was no point in getting formal advice on the signature”. Mr Dhanda had clearly managed many building projects. Earlier in 2016, he signed the Ironbridge Contract. As project manager of a substantial development project at Ironbridge and a further substantial project at Willenhall, I consider it extremely unlikely that it was not possible for him to find sufficient examples of his own signature for submission to a handwriting expert to obtain a report to support the Defendant’s position that the signature was forged.

I did not find Mr Dhanda’s evidence credible. I prefer the evidence of Mr Matharu and Mr Farmah. I find that Mr Dhanda signed the JCT contract on 19 August 2016.