Diamond Jewellers Ltd v Mittal (t/a Mittal Trading Co)

A claim based on alleged rescission of jewellery transactions requires proof that the parties agreed to rescind and that repayment was made on terms requiring return of the goods. Where the claimant’s account is unsupported and lacks credibility, while the documentary and oral evidence supports an alternative commercial explanation for the payments, the claim may fail on the facts. A conversion claim adds nothing where it depends on the same unproved factual case.

Diamond Jewellers Ltd claimed £187,568.17 from Dr Mittal, alleging that he had agreed to rescind two purchases of gold jewellery, had received repayment through transfers to a Dubai account, and had failed to return the jewellery. An alternative claim was brought in conversion.

Dr Mittal denied requesting or agreeing to rescission and maintained that the payments were made for the benefit of a Dubai jewellery business in settlement of trade transactions with Diamond. The central issue was whether Diamond had proved its account of the transactions.

1. The claim was dismissed. Diamond failed to establish that either transaction had been rescinded on terms requiring Dr Mittal to return the jewellery.
2. The surrounding circumstances were inconsistent with Diamond’s account. It was inconceivable that, if the first transaction had been rescinded without return of the jewellery, the parties would have entered into a second agreement of like effect while the first jewellery remained unreturned.
3. The absence of any contemporaneous claim, including in Diamond’s financial records and correspondence before April 2012, substantially undermined the alleged liability.
4. The evidence supporting Dr Mittal’s case was coherent, logical and supported by documentation. The documents showed that the payments were made in connection with trade transactions involving Mittal Dubai and Gold Craft. The court accepted that documentation as genuine.
5. Diamond’s case depended entirely on Mr Ali’s evidence. The court found that evidence lacking credibility. Dr Mittal’s evidence and that of Mr Mittal survived cross-examination and was preferred.
6. The conversion claim added nothing of substance because it depended on the same factual case, which had not been proved.