Shah v Shah & Ors

An appellate court may review a trial judge’s preference for one witness’s evidence where that preference resulted from erroneous inferences on other issues. The court must assess whether the error materially affected the finding under challenge. Credibility findings remain evaluative and must be considered in the context of the circumstances as a whole.

Experienced business people who sign a document expressly executed as a deed may be found to have intended legal relations. Alleged duress or undue influence requires careful evaluation against the surrounding circumstances, including any vulnerability recognised by the trial judge. An erroneous ancillary finding does not require a retrial where it did not significantly affect the relevant credibility findings.

The third and fourth defendants sought permission to appeal against a judgment of His Honour Judge Crawford QC dated 20 July 2000. The judge ordered them jointly and severally to pay £1.5 million, with interest of £170,302.86, after they signed a document described as a deed concerning the claimant’s investment in Reliance Bank in Kenya.

The renewed application raised the validity of the deed, including estoppel and compliance with Law of Property (Miscellaneous Provisions) Act 1989, section 1, together with whether the defendants intended to create legal relations and whether they signed under duress or undue influence. The central appellate issue on the latter grounds was whether an erroneous finding about the destination of the money undermined the judge’s credibility findings.

1. Disposition. Permission to appeal was granted on the deed issue, comprising the alleged estoppel and whether the deed’s non-compliance with section 1 of the Law of Property (Miscellaneous Provisions) Act 1989 was nevertheless saved. Permission was refused on intention to create legal relations and duress or undue influence. The application was therefore allowed in part.
2. Appellate review of credibility. The court applied the approach stated by Lord Simon in Watt or Thomas v Thomas [1947] AC 484: an appellate tribunal may examine the reasoning underlying a preference for one witness’s evidence where that preference resulted from erroneous inferences on other matters. The nature and circumstances of the case remain relevant.
3. The trial judge was wrong to describe as incontrovertible the alleged transfer of the money to Mr Amil Chudasama’s account. He had also gone too far in criticising the defendants and had made findings beyond what was necessary.
4. Those errors did not materially undermine the findings that the defendants intended to create legal relations or that their evidence concerning duress was unreliable. The deed was plainly capable of legal consequences, was headed “Deed”, and had been amended before execution. The defendants were experienced business people. The missing investment and the prospect of official investigation made their vulnerability and motive to execute the deed relevant circumstances. The judge was entitled to accept Mr Anup Shah’s evidence and reject the alleged threat.
5. Lord Justice Tuckey agreed that the surrounding circumstances, the defendants’ positions within the bank, Mr Anup Shah’s evidence and the inherent improbability of their account fully justified the judge’s conclusions. Sir Christopher Slade agreed with both judgments and the proposed order.

• Court of Appeal (Civil Division): Permission to appeal granted on the deed issue and refused on intention to create legal relations and duress or undue influence; application allowed in part.
• Queen’s Bench Division: His Honour Judge Crawford QC, on 20 July 2000, entered judgment against the third and fourth defendants jointly and severally for £1.5 million plus interest of £170,302.86.