A woman who clashed with her brother-in-law over ownership of a property has failed in her legal bid to overturn a ruling that she held it on his behalf.
In the recently published case of Agarwala v Agarwala, the woman had bought a property in her own name after her brother-in-law approached her with the idea, saying he did not have the necessary credit rating. The property was to be converted into a bed and breakfast business.
However, the pair later fell out, with each claiming sole ownership. The man forged his sister-in-law’s signature on documents but this deception was quickly discovered. The case went to court. Mrs Agarwala claimed that the plan had been for the man to run a bed and breakfast at the property alongside the one he already ran, with overbookings being sent from there. She was the receive an income from this, she claimed.
Meanwhile, Mr Agarwala claimed that the property and business were in reality his, and that he was paying a salary to her to do the business accounts and also giving her the money to pay the mortgage.
The judge ruled in his favour, saying she held the property ‘in trust’ for the man – ie she was the legal owner of the property but the income and other benefits of the business were his. The judge noted:
“A claimant who, like [Mr Agarwala] here, begins by putting forward forged documents in support of his claim will inevitably find all his subsequently evidence viewed with extreme caution. Nevertheless it is important for me to remind myself, as criminal juries are reminded by judges, that the fact that a person has told a lie to the police or the court does not necessarily mean that the whole of his story is false, still less that he is guilty of the misconduct charged. Here he says now that, although the documents or at least their dates and signatures were false, their contents were essentially true – that he was seeking retrospectively to create a written record of an oral trust agreement that had existed from the first.”
“As indicated above, this account is corroborated by his own conduct in other similar situations, and by the contemporary emails considered as a whole; and in my view it is not refuted by the payment history or by [Mrs Agarwala’s] testimony before me, which is inconsistent with her own previous statements in the emails. When I stand back and look at the evidence as a whole, and ask myself which account is the more probable…It is very difficult to accept that such a man not only handed over to his sister-in-law for nothing a promising business proposition which he had been developing for himself, but also agreed to run it for her at no charge. (The supposed benefit of being able to send surplus guests there at no charge is an inadequate and unconvincing one.)”
Mrs Agarwala appealed. But, in the Court of Appeal, Lady Justice Hallett DBE, Lord Justice Sullivan and Mr Justice Arnold concluded:
“The judge’s reasons for concluding that Sunil’s account of the agreement was more likely are perfectly intelligible.”
In addition, they continued:
“…the judge was entitled to conclude that the supposed benefit relied upon by [Mrs Agarwala] – that is to say [Mr Agarwala’s] ability to send his surplus B&B guests to the property at no charge – was both inadequate and unconvincing.”
Mrs Agarwala had been a “conduit” for payments from the profits of the business, and the judge had properly taken into account Mr Agarwala’s track record as a businessman.