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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> FCL (London) Ltd v Voice [2012] EWHC 3684 (QB) (21 December 2012) URL: http://www.bailii.org/ew/cases/EWHC/QB/2012/3684.html Cite as: [2012] EWHC 3684 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		21/12/2012

His Honour Judge Richard Seymour Q.C. :

Introduction

1. The defendant in this action, Mrs. Lisa Voice, is the daughter, and only child, of the late Mr. Cecil Kullman Rosen. Mr. Rosen died on 26 May 1993. During his lifetime Mr. Rosen had developed successful property businesses which were conducted through a company called Woolcastle Ltd. and two subsidiary companies, respectively called Investment & Securities Trust Ltd. and Central Town Properties Ltd. Mr. Rosen was also a partner in an estate agency business, conducted under the name Manning & Co. On the death of her father Mrs. Voice, who was named as the residuary legatee in his will, succeeded to a majority shareholding in Woolcastle Ltd., became a director of that company and its two subsidiary companies, and became a partner in Manning & Co. Mrs. Voice was also named in her father's will as an executrix. Two other executors were named, Mr. Malcolm Ozin, who had been a director of Woolcastle Ltd. and a partner in Manning & Co. along with Mr. Rosen, and Mr. Barrie Carmel, who is an accountant and the senior partner in an accountancy firm called Wilson Wright & Co. ("Wilson Wright"). At a point subsequent to the events with which this judgment is concerned Wilson Wright transformed its status into that of a limited liability partnership.
2. For a considerable period after the death of Mr. Rosen Mr. Ozin continued as a director of Woolcastle Ltd. and a partner in Manning & Co. Mrs. Voice indicated in her witness statement dated 12 November 2012 prepared for the purposes of this action that she came to rely heavily upon Mr. Ozin not only in relation to business matters but also in relation to her personal affairs. Mr. Ozin retired as a director of Woolcastle Ltd. and a partner in Manning & Co. in March 2002. He was replaced in both roles by Mr. Peter Silverman, and Mrs. Voice, she said, came to rely upon Mr. Silverman in the same way that she had previously relied upon Mr. Ozin.
3. In circumstances which were unclear, during his lifetime Mr. Rosen came to have funds ("the Swiss Funds") in Switzerland the existence of which was unknown to the Revenue authorities of the United Kingdom. Mr. Rosen granted his daughter a power of attorney in respect of the Swiss Funds on 3 August 1981, but he continued to control the Swiss Funds. On 6 September 1985 Mrs. Voice married Mr. Stephen Voice. On the occasion of her marriage Mr. Rosen transferred control of the Swiss Funds to his daughter, but, she told me, he instructed her not to tell her husband about the Swiss Funds or to utilise them. The aggregate amount of the Swiss Funds at the time of transfer was not, by the time of the events with which this judgment is concerned, known precisely, but was believed to fall within the range £6,500,000 to £6,750,000. Although it was known that the Swiss Funds were denominated in sterling, records concerning the amount of the Swiss Funds or any transactions concerning them were not available, by the time it was appreciated that it was important, if possible, to have that information in respect of the period commencing on 6 September 1985, for any period earlier than 1997. The inhibitions imposed by her father upon Mrs. Voice telling her husband about the Swiss Funds or utilising them were removed by Mr. Rosen in April 1986 and from that time Mrs. Voice had full control of the Swiss Funds.
4. At the time of the marriage of Mrs. Voice Capital Transfer Tax ("CTT") was payable by those domiciled in the United Kingdom for tax purposes on lifetime gifts at the lifetime rate. However, the tax regime was altered by Finance Act 1986. From March 1986 a gift made by or to a person domiciled in the United Kingdom for tax purposes was potentially an exempt transfer, with Inheritance Tax ("IHT") being payable only if the donee died within seven years of the gift. Finance Act 1986 also introduced the concept of a "gift with reservation", which was not a potentially exempt transfer and was treated as remaining part of the assets of the donor unless and until the "reservation" was released. Mr. Rosen died more than seven years after the relevant provisions of Finance Act 1986 came into force. If Mrs. Voice only became beneficially entitled absolutely to the Swiss Funds in April 1986 there was no liability either to CTT or to IHT in respect of the actual transfer of the Swiss Funds to her. However, if Mrs. Voice became beneficially entitled to the Swiss Funds absolutely on 6 September 1985, in theory there was a liability on the part of the estate of Mr. Rosen to pay CTT on the transfer. Quite separate from that point, even assuming no liability in respect of CTT, the transfer of the Swiss Funds to Mrs. Voice affected other transfers made to her by her father during his lifetime, but less than seven years before his death, because there was a nil rate band of £150,000 in respect of transfers before IHT was payable. If, as was the case if the Swiss Funds had been transferred to Mrs. Voice beneficially and absolutely in September 1985, that nil rate band had been fully utilised, then a further sum of 40% of £150,000, namely £60,000, was properly payable by the estate of Mr. Rosen.
5. Wilson Wright acted as accountants to Mr. Rosen from 1984 until his death. The firm also acted as accountants to Woolcastle Ltd. and its subsidiaries from 1984. It acted as accountants to Mrs. Voice from 1984 until the date of the trial save in two periods. The first was in 2001 to 2002, and is not material to any issue in this action. The second was between about 16 November 2007 and early 2008, and occurred in circumstances to which I shall come. There was no suggestion that anyone at Wilson Wright was aware of the Swiss Funds at any time prior to about October 2006.
6. The marriage of Mr. and Mrs. Voice was not without its difficulties. Mr. and Mrs. Voice separated in 2000 and were divorced in March 2001. A consent settlement order in relation to financial provision was made in the divorce proceedings on 26 July 2001 by which she agreed to pay sums to him. Mr. Voice died in June 2003.
7. It seems that for a considerable period of time Mrs. Voice was in the habit of patronising a couturier based in London, Mr. Ricci Burns. Mr. Burns became a friend and confidant of Mrs. Voice. Mr. Burns is in fact the uncle of Mr. Silverman. Mr. Burns has a son, sometimes known as Julian Ciecierski-Burns, but to whom I shall refer in this judgment as "Mr. Julian Burns", a style which he seemed also to use. In 2007 Mr. Julian Burns was a trainee solicitor employed by Messrs. Davenport Lyons ("Davenports").
8. Mr. Shehzad Farrukh is a chartered accountant. At the times material to the issues in this action Mr. Farrukh practised as an accountant through the claimant, FCL (London) Ltd. He also controlled another company, Warnfords Ltd. The business of Warnfords Ltd. seems to have been the provision of book-keeping and payroll services. In some of the documents to which it will be necessary to refer in this judgment, particularly e-mails, Mr. Farrukh wrote as if acting on behalf of the claimant, but in others he wrote as if acting on behalf of Warnfords Ltd. However, it was common ground before me that, in reality, whatever company appeared to be involved in producing a document, it was in fact Mr. Farrukh who generated it, and, for practical purposes, it is appropriate to treat the claimant as being Mr. Farrukh. I shall so treat it for the purposes of this judgment.
9. Mr. Farrukh was, from at least the mid-1990s, a friend of Mr. Ricci Burns, and it appeared that Mr. Ricci Burns held the taxation and accountancy skills of Mr. Farrukh in high regard. Mr. Ricci Burns introduced Mr. Farrukh to Mrs. Voice in the mid-1990s. It appears that Mrs. Voice became friendly with Mr. Farrukh and that he provided some services for her in the latter part of the 1990s.
10. Mr. Ronald Rahme was an associate of Mr. Voice. After the separation of Mr. and Mrs. Voice Mr. Voice moved in with Mr. Rahme. After the death of Mr. Voice Mr. Rahme alleged that he had entered into agreements with Mr. Voice under which he, Mr. Rahme, was entitled to a large proportion of the divorce settlement agreed to be paid by Mrs. Voice to Mr. Voice. He also alleged that he had been owed substantial sums of money by Mr. Voice. In May 2006 Mr. Rahme commenced proceedings against the estate of Mr. Voice. The various claims of Mr. Rahme against the estate of Mr. Voice came to trial before Morgan J in April 2009 and all failed. A counterclaim against Mr. Rahme was successful. However, in the course of seeking to persuade the estate of Mr. Voice in 2004, prior to the commencement of his action, to settle his claims Mr. Rahme, who had somehow come to know about the Swiss Funds, suggested that, unless an accommodation could be reached, he would feel it his duty to bring the existence of the Swiss Funds to the attention of HM Revenue and Customs ("HMRC"). In the event that was not a course which Mr. Rahme followed. However, his indication of his intentions must have focused the attention of Mrs. Voice on the existence of a problem concerning the Swiss Funds. That problem seemed to become acute in 2006 when, against the background of a claim by Mr. Michael Voice, the son of Mr. and Mrs. Stephen Voice, against the estate of Mr. Stephen Voice, HMRC started to raise queries as to the amount of his estate, indicating that it had received information that the estate was in fact some £5,000,000 larger than had been declared.
11. It appears that Mrs. Voice discussed the problem of the Swiss Funds both with Mr. Silverman and with Mr. Ricci Burns. Mr. Silverman wrote a letter dated 9 October 2006 to Mr. Carmel giving him some indication of the circumstances. Subsequently, on 17 November 2006 a meeting took place between Mrs. Voice, Mr. Silverman, Mr. Ozin and Mr. Carmel at which the problem was discussed. Meanwhile, on 7 November 2006 a meeting had taken place between Mrs. Voice, Mr. Silverman, Mr. Ozin and Mr. Farrukh to discuss exactly the same matter, as well as two other points. It seems that it was the view of both Mr. Carmel and Mr. Farrukh that it was necessary for Mrs. Voice to make disclosure to HMRC of the Swiss Funds and of the circumstances in which she had come to have them. In order to make a proper and complete disclosure it was necessary to obtain as much information as possible as to the amount of the Swiss Funds when transferred to Mrs. Voice, of the transactions concerning the Swiss Funds which took place thereafter, and the income or capital appreciation derived by Mrs. Voice from the Swiss Funds. At this stage matters were left to Mr. Carmel to pursue. Wilson Wright made a preliminary disclosure concerning the Swiss Funds to HMRC by letter dated 19 February 2007. Mr. Carmel advised that legal advice should be taken concerning the CTT and IHT implications of the existence of the Swiss Funds and their transfer to Mrs. Voice. He recommended that Messrs. Blake Lapthorn Tarlo Lyons ("BLTL") be instructed to give that advice. BLTL was instructed at the beginning of March 2007.
12. HMRC responded to the letter dated 19 February 2007 written by Wilson Wright in a letter dated 26 March 2007. In that letter HMRC required that it be provided with full details of all Mrs. Voice's overseas investments by 27 April 2007.
13. The next material development was that on or about 17 April 2007 HMRC announced what was called an "Offshore Disclosure Facility" ("the ODF"). What this amounted to was an invitation to those who should have, but had not, disclosed assets held outside of the United Kingdom to HMRC, to do so. Whilst it was made clear that any tax which should have been paid would have to be paid, along with interest and penalties, the incentives to give disclosure which were offered were that the disclosure sought was only for a period of 20 years prior to the announcement of the ODF, and that the penalties payable would be capped at 10%. However, in order to take advantage of the incentives offered, the full amount of the tax due, interest and penalties at the stipulated rate would have to be paid at the time of disclosure.
14. Strictly, of course, the ODF did not apply to Mrs. Voice because preliminary disclosure of the Swiss Funds had been made by the letter dated 19 February 2007 written by Wilson Wright. However, the view which was taken by Mr. Carmel and BLTL was that it was likely that HMRC would treat the disclosure on behalf of Mrs. Voice as falling within the ODF, as otherwise her voluntary disclosure without any offer of incentives would be treated less favourably than disclosures only prompted by the incentives. And so it came to pass. Separate notifications under the ODF on behalf of the executors of Mr. Rosen and on behalf of Mrs. Voice were made by BLTL to HMRC by letters each dated 19 June 2007. Those notifications were acknowledged by HMRC in a letter dated 27 June 2007. In that letter HMRC confirmed that full disclosure and payment of the sums due would have to be made by 26 November 2007.
15. It appears that obtaining the information necessary to make a full disclosure to HMRC proved difficult, and by June 2007 not much progress had been made. Mr. Carmel prepared what he described in the letter dated 12 June 2007 under cover of which the document in question ("the Draft Note") was sent to Mrs. Voice, Mr. Silverman, Mr. Ozin, and Mr. Douglas Smith and Mr. Peter Wilson, both of BLTL, as "… draft note of where we are up to present …". In the context of the issues in this action that was an important document. It extended over six pages and identified many questions and assumptions which needed to be addressed. En passant it set out what hard information had been ascertained. The concluding section was entitled "Tax Liabilities". The Draft Note was slightly updated after first being sent, and the updated version was enclosed with a letter dated 14 June 2007 written by Mr. Carmel to all of the addressees of the letter dated 12 June 2007 save Mrs. Voice. In the updated version the section entitled "Tax Liabilities" was in these terms:-

"1. Based on a valid gift having been made by C K Rosen (deceased) to Lisa Voice in September 1985 and the assumptions previously outlined, it is estimated that the total tax, interest and penalty would be in the region of £5,000,000 - £6,000,000. This assumes that the Revenue will agree that the penalty should be restricted to 10% as provided for per the 'amnesty' which expires on June 22^nd [which was in fact the date by which an application under the ODF had to be made, not the date by which the actual disclosure had to be made].

2. There will also be a liability on the Executors of C K Rosen (deceased).

i) CTT liability on the gift made in 1985. The tax, interest and 10% penalty net of IHT saving could be in the region of £6,000,000. However, the amnesty provisions specifically provide for only bringing into account liabilities for the past 20 years and it is possible the Revenue will not therefore seek this.

ii) The gift inter vivos made in September 1985 would increase the IHT payable on the later gifts made before death. This liability is estimated to be in the region of £120-£130,000 including a 10% penalty.

3. In the event that there was not a valid gift in 1985, the Executors of C K Rosen would be liable to additional IHT at May 1993. Against this the tax liabilities for L Voice in respect of 1987/8 to 1992/3 inclusive would drop out. We estimate the net additional tax and interest again including a 10% penalty, would be in the region of £2,000,000. However in this instance there would be no possibility of the CTT liability referred to in 2 (i) above crystallising."

16. Whilst it was obvious from the Draft Note that it was prepared at a time when much was unknown which could affect the proper calculation of what was due, it was tolerably clear that whether or not there was a liability to pay CTT, interest and penalties of a figure of the order of £6,000,000 depended upon just two matters. The first was that HMRC accepted that there had been a gift of the Swiss Funds by Mr. Rosen to his daughter in September 1985. The second was that HMRC chose to treat the transfer as falling within the ODF and, in accordance with the ODF, not seeking tax in relation to transactions occurring more than 20 years before the announcement of the ODF. It is important, as it seems to me, to appreciate that the liability in respect of CTT was either about £6,000,000 or nil, and which was dependent entirely upon decisions to be made by HMRC. There was simply no scope for arguing with whatever decision HMRC took.
17. Mrs. Voice, according to her witness statement in this action dated 12 November 2012, found Mr. Farrukh's initial reactions to the problem of the Swiss Funds comforting, and asked Mr. Silverman to keep him informed of progress. That Mr. Silverman, according to his evidence, which Mr. Farrukh disputed, did. Whether or not Mr. Farrukh was given any information as to how matters were progressing between about February 2007 and about June 2007, it seems that sometime towards the end of June 2007 Mr. Ricci Burns suggested that a meeting take place between Mrs. Voice, Mr. Silverman, Mr. Farrukh and himself. It was common ground that a meeting did take place at the Sheraton Hotel in Belgravia, London. Mr. Farrukh contended that the meeting took place on 3 July 2007. Mrs. Voice and Mr. Silverman asserted that the meeting had taken place on 5 July 2007, and fortified their assertion by reference to a note in Mr. Silverman's diary for 2007. Nothing turned on the actual date of the meeting. However, given Mr. Silverman's diary entry, it seemed likely that he and Mrs. Voice were correct as to the date.
18. At paragraph 8 of the Amended Particulars of Claim in this action it was alleged that:-

"By an oral agreement made on or about 3 July 2007 ("the Agreement") the Defendant engaged the Claimant to provide tax advice services with regard to the Disclosure made by the Defendant to HM Revenue & [Customs] and to assist her and her other advisers in reducing, so far as possible, her total liability for taxes, penalties and interest payable by her consequent on the Disclosure."

19. Save as to the date of the agreement, those allegations were admitted at paragraph 7 of the Amended Defence.
20. In this action Mr. Farrukh sought payment of what it was contended was the balance of the fees agreed for the services which he agreed to provide. It was not in dispute that Mr. Farrukh had done some work, to the detail of which I shall come, pursuant to the agreement in question, and that he had been entitled to a fee. What was in dispute was what terms as to remuneration had originally been agreed, and whether what was originally agreed had been varied, and, if so, to what effect.
21. The case for Mr. Farrukh pleaded in the Amended Particulars of Claim as to what had originally been agreed was:-

"9. There were express terms of the Agreement that:

9.1 the Defendant would pay to the Claimant a fee amounting to 10% of the difference between the Defendant's liabilities for capital taxes on the gift, income taxes, penalties and interest as estimated by Wilson Wright and the amount of such capital taxes, income taxes, penalties and interest as finally assessed by HMRC.

9.2 the Defendant would make a payment of £30,000 on account of such fees to the Claimant.

9.3 The Defendant would make further interim payments as agreed between the Claimant and the Defendant from time to time.

10. The relevant estimate was that prepared by Wilson Wright on 12 June 2007, that being the only, alternatively the most recent estimate that they had prepared as at 3 July 2007.

11. Accordingly, the Claimant was entitled to be paid by the Defendant 10% of the difference between £6,000,000 and such liability to tax, penalties and interest as was finally agreed with HMRC in respect of her liability to tax on the gift by her father of the fund, the subject of the Disclosure, plus 10% of the difference between £6,000,000 and such liability to taxes, penalties and interest as was finally agreed with HMRC in respect of undisclosed investment income the subject of the Disclosure."

22. Although crucial, the differences between the parties as to what had been agreed in respect of the remuneration of Mr. Farrukh at the meeting in July 2007 was narrow. The case of Mrs. Voice pleaded in the Amended Defence in response to the allegations set out at paragraphs 9, 10 and 11 of the Amended Particulars of Claim was:-

"8. Paragraphs 9 and 10 are denied. It was an express term of the Agreement that the Defendant would pay the Claimant fees equivalent to 10% of the savings achieved by Mr. Farrukh's intervention, such savings calculated as being the difference between (a) a considered calculation of the likely liability to HMRC for tax, penalties and interest and (b) the actual amount paid. It was further agreed that the Defendant would pay the Claimant the sum of £30,000 plus VAT on account of such fees but it is denied that it was agreed that the Defendant would pay any further sums on account to the Claimant. The Claimant rendered an invoice for such fee on 9 July 2007, which the Defendant duly paid.

9. The Defendant avers that the relevant considered calculation was contained in the letter dated 6 November 2007 written by Wilson Wright to Mr. Silverman estimating the Defendant's potential liability to HMRC for tax on undisclosed investment income, interest and penalties as being £3.8 million and that, on a correct legal analysis, the Defendant was never a[t] risk of being liable to HMRC for inheritance tax (other than as referred to at paragraph 14 below).

10. On proper construction of the Agreement, the Claimant was only entitled to a fee in the event that his intervention was the effective cause of a saving to the Defendant of tax. By letter dated 26 October 2007 the Claimant wrote to Mr. Silverman stating "I am relieved to note that you still agree to my 10% fee of the overall savings achieved due to my intervention on the current Swiss tax affairs."

23. It was common ground that Wilson Wright had in fact produced a calculation ("the Wilson Wright Calculation") which was sent to Mr. Silverman under cover of a letter dated 6 November 2007 in which the liability of Mrs. Voice in respect of income tax, interest and penalties on her earnings from the Swiss Funds were put at £3,799,546. It was also common ground that, separately, BLTL had calculated, and communicated in a letter dated 13 November 2007 the interest part of, a liability ("the IHT Liability") on the part of the estate of Mr. Rosen in respect of the consequences of the transfer of the Swiss Funds to Mrs. Voice in relation to the nil rate band for IHT, of £100,638.60, calculated as the principal amount of £60,000, penalty of 10% amounting to £6,000, and interest of £34,638.60. Moreover, it was common ground that the total sum which had been accepted by HMRC, by a notification dated 14 February 2011, in respect of both the liabilities of Mrs. Voice and the liabilities of the estate of Mr. Rosen had been £3,435,744.45. On the case of Mrs. Voice, therefore, what was prima facie due to Mr. Farrukh pursuant to the agreement made in July 2007 was 10% of the difference between the final amount stated in the Wilson Wright Calculation, £3,799,534, plus the amount of the IHT Liability, £100,638.60, totalling £3,900,172.60, and £3,435,744.45, which difference amounted to £464,428.15. Consequently the entitlement of Mr. Farrukh had been to be paid £46,442.82. However, as was also common ground, interim payments totalling £105,000 had actually been made to Mr. Farrukh, with the result that he had been overpaid and no further payment was due. What Mr. Farrukh was entitled to, if anything, pursuant to the agreement made in July 2007 thus depended critically upon whether what had been agreed was that his fee would be based on the difference between the figures contained in the "Tax Liabilities" section of the Draft Note and what was actually accepted by HMRC, in which event Mr. Farrukh was entitled at least to 10% of £6,000,000 by reason of HMRC electing not to seek CTT on the transfer of the Swiss Funds, or on the difference between whatever was the outcome of the ultimate considered assessment of liabilities made by Wilson Wright, and the what was actually accepted by HMRC, in which event the claimant's case failed entirely.
24. Before coming to the evidence relevant to my findings concerning what was the basis of assessment of the fees of Mr. Farrukh agreed at the meeting in July 2007 it is convenient to note the bases upon which his pleaded case was advanced in the Amended Particulars of Claim. What was alleged was that the original agreement alleged had been varied by oral agreement between Mr. Farrukh and Mrs. Voice on two occasions. The primary claim of Mr. Farrukh in this action was based on what was said to be the later of the two variations. An alternative case was advanced to the effect that, if the second variation was not proved, Mr. Farrukh would rely on the first variation, or, it seemed, if the first variation were not made out as pleaded, a part of it. It did not appear to be contended in the Amended Particulars of Claim that Mr. Farrukh was entitled on any hypothesis to the sum alleged to have been due under Mr. Farrukh's version of the July 2007 agreement, but Mr. Donald McCue, who appeared on his behalf at the trial, made clear in his closing submissions that that was intended as Mr. Farrukh's ultimate fall-back position.
25. The allegations pleaded in relation to the variation of the original agreement which was said to have been first in time were:-

"20. In or about July 2008 the [sic] Mr. Farrukh and the Defendant discussed the Claimant's fees relating to his work in respect of the Defendant's potential inheritance tax liability and agreed the following:

20.1 The Claimant would reduce its fees for the advice and assistance provided to the Defendant in relation to inheritance tax to £453,000 plus VAT.

20.2 The Claimant would defer £93,000 (plus VAT) of his fees.

21. On 31 July 2008 the Claimant submitted an invoice to the Defendant in the sum of £329,000 (£280,000 plus VAT), being the agreed reduced fee of £453,000 plus VAT less the sum of £93,000 plus VAT which the Claimant had agreed to defer, less £80,000 already received by the Claimant.

22. At or about the end of August 2008 Mr. Farrukh met with the Defendant in the presence of one Ricci Burns. At the meeting the Defendant acknowledged her liability for the Claimant's fees as set out in the invoice dated 31 July 2008 and agreed to pay to the Claimant £100,000 on account of those fees. Such payment was not, in fact, made.

23. The Claimant's [sic] liability for income and capital gains taxes was finally settled in the sum of £3,335,106.

24. In the premises, and but for the agreement pleaded below, the Claimant would have been entitled to be paid by the Defendant, in addition to the sum referred to in paragraph 21 above [presumably a reference to £329,000], the further sum of £334,489, being £266,489 (10% of £6,000,000 - £3,335,106), less the further £25,000 treated by agreement as received on account, plus the sum of £93,000 deferred from the invoice dated 31 July 2008, plus VAT of £66,897.80, a total of £401,386.80."

26. The way in which the case of Mr. Farrukh as to the ultimate alleged variation of the original agreement made in July 2007 was put in the Amended Particulars of Claim was:-

"25. On 8 July 2009 the Claimant wrote to the Defendant proposing a revised fee structure based on estimates of liability of £4.2 million for inheritance tax, penalties and interest and £5.7 million for income tax, penalties and interest. This was a reduction from the fees to which he was contractually entitled calculated by reference to Wilson Wright's estimate of 12 June 2007.

26. In early August 2009 Mr. Farrukh and the Defendant met at the Defendant's home. A meeting had been scheduled for 6.00 pm for the Claimant and Davenport Lyons to help the Defendant prepare for a forthcoming meeting with HMRC. Mr. Farrukh arrived early to discuss the Claimant's letter of 8 July 2009. The Defendant did not agree to make monthly payments on account of £16,000, as stated in the letter of 8 July 2009, but otherwise agreed in principle the revised fee structure set out in that letter. The Claimant offered to fix his fees at £690,000 plus VAT which, after deducting payments already made which the Claimant had agreed to credit against his fees, left a balance payable of £585,000. The Defendant accepted that offer and agreed that she would pay the Claimant £585,000 plus VAT in settlement of the balance of his fees, such sum to be paid following the final agreement by HMRC as to the liabilities of the Defendant arising out of the Disclosure, with interim payments to be made by agreement from time to time.

27. Following that meeting the Claimant wrote to the Defendant on 6 August 2011 [sic] intending to confirm the agreement that had been reached but by error omitted from that letter the agreement as to a fixed balance of fees of £585,000 plus VAT and to pay interim payments from time to time as agreed.

28. Accordingly, the Defendant is indebted to the Claimant in the sum of £585,000."

27. Rather curiously the pleaded case anticipated the point that after making the alleged second variation agreement Mr. Farrukh wrote a letter to Mrs. Voice, in fact dated 6 August 2009, in which one might have expected him to have confirmed the second variation agreement, if such had been made, but he did not do so.
28. It is, I think, fairly obvious that, if what was agreed at the meeting in July 2007 was that for which Mrs. Voice contended, it was improbable in the extreme that either of the first or second alleged variation agreements had been made, because, far from being, as Mr. Farrukh contended, advantageous to Mrs. Voice by reducing her obligations to him, they were seriously disadvantageous. Thus what had in fact been agreed at the meeting in July 2007 was probably critical to the resolution of all of the ways in which Mr. Farrukh's case was put. Puzzlingly, the only alternative to the claim for £585,000 plus Value Added Tax, at 20% amounting to a total of £702,000, which was pleaded in the Amended Particulars of Claim was:-

"29. Alternatively, in the event that the Defendant successfully disputes the existence, validity or enforceability of the agreement pleaded in paragraph 25 above, then the Claimant is entitled to recover the sum of £730,386.80, being the sum of the fees and VAT referred to in paragraphs 21 and 24 above."

Yet in the prayer to the Amended Particulars of Claim there was a further alternative claim, for the sum of £329,000, the amount of the invoice pleaded at paragraph 21.

The law

29. The reference at paragraph 10 of the Amended Defence to "proper construction of the Agreement" prompted Mr. McCue to remind me that no issue of construction can arise in relation to an alleged oral agreement: rather the question is simply what did the parties in fact agree.
30. Mr. McCue drew to my attention some observations of Lord Neuberger of Abbotsbury in Thorner v. Major [2009] 1 WLR 776 at page 800:-

"82. However, such a view is inconsistent with the illuminating analysis in the opinion of my noble and learned friend, Lord Hoffmann, in Carmichael v. National Power plc [1999] I WLR 2042, 2048E – 2015C. This shows that (a) the interpretation of a purely written contract is a matter of law, and depends on a relatively objective contextual assessment, which almost always excludes evidence of the parties' subjective understanding of what they were agreeing, but (b) the interpretation of an oral contract is a matter of fact (I suggest inference from primary fact), rather than one of law, on which the parties' subjective understanding of what they were agreeing is admissible."

31. Reference was made to that passage, and to the passage from the speech of Lord Hoffmann there referred to, by Aikens LJ in giving the leading judgment in BVM Management Ltd. v. Yeomans [2011] EWCA Civ 1254:-

"23. When the terms of a contract have to be ascertained from oral exchanges and conduct that is a question of fact: see Carmichael v. National Power plc [1999] 1 WLR 2042 at 2049C per Lord Hoffmann; Thorner v. Major [2009] 1 WLR 776 at [82] per Lord Neuberger of Abbotsbury. Moreover, in the case of a contract which is entirely oral or partly oral, evidence of things said or done after the contract was concluded are admissible to help decide what the parties actually agreed: Maggs v. March [2006] BLR 395 at 400 per Smith LJ; Crema v. Cenkos Services plc [2011] 1 WLR 2066 at [34] per Aikens LJ. Many cases have emphasised that an appellate court should not readily hold [that the finding of a judge as to the terms of an oral contract is erroneous (?)], particularly in a case where the finding is dependent upon oral evidence, unless the judge's finding is obviously wrong, is an unreasonable finding on the evidence or the finding produces a result unsustainable in law. All this means that we must be very slow to reverse the judge's evaluation of the facts."

32. The principles stated in those passages were not in dispute before me.

The evidence

33. The determination of issues of fact relevant to an agreement made orally depends, essentially, upon three factors. One is the evidence of the witnesses who were present when the agreement was made. The demeanour of each relevant witness is plainly critical to the assessment of the weight to be given to the evidence of that witness. A second is what indications can be found in contemporaneous documentation, and any documentation produced by any of the relevant witnesses before the commencement of the litigation, of what was in fact agreed. The third is inherent probabilities. The more extreme the consequences for one party or the other of the agreement being to one effect rather than the other contended for, the less likely it is that the agreement envisaged such consequences. These factors are not independent of each other. The process of assessing the evidence of the relevant witnesses involves considering what each says about documents which appear not to support their evidence as to what was agreed and how each deals with any suggested extreme consequences of that for which he or she contends upon the opposite party.
34. It was common ground that those at the meeting in July 2007 at which an agreement was made that Mrs. Voice should engage the services of Mr. Farrukh were Mr. Farrukh, Mrs. Voice, Mr. Silverman and Mr. Ricci Burns. Mr. Farrukh, Mrs. Voice and Mr. Silverman were called to give evidence at the trial. Mr. Ricci Burns was not.
35. In cross-examination each of Mr. Farrukh, Mrs. Voice and Mr. Silverman maintained the account of the meeting in July 2007 given in his or her witness statement prepared for the purposes of this action, as corrected, in the case of Mrs. Voice, by her acceptance that her reference to a letter dated 12 February 2007 was inaccurate as to its contents, and in the case of Mr. Silverman, as to the time of the meeting as stated in his witness statement.
36. In his witness statement dated 12 November 2012, in fact his seventh witness statement in this action, Mr. Farrukh said about the meeting:-

"21. Some time in June 2007 Mr. Burns contacted me on behalf of Mrs. Voice. He said that Mrs. Voice had problems that he felt I might be able to help with, and that her accountants were "shafting" her. He asked if we could meet and I agreed. He then arranged a meeting between himself, Mrs. Voice, Mr. Silverman and me which took place on 3^rd July 2007 at a hotel close to Lowndes Square. In her Defence in this case Mrs. Voice alleges that the meeting was on 5^th July. I am confident that it was the 3^rd.

22. Mrs. Voice, Mr. Burns and Mr. Silverman did not bring any papers with them. Mrs. Voice explained the situation to me in as much detail as she was able. There was a gift from her late father at the time she was married to Stephen Voice in September 1985 of over £6 million, which he held in an account in Switzerland. This gift had not been declared to the Inland Revenue and she had been advised that disclosure of it triggered very heavy potential liabilities in respect of Income Tax and CTT/IHT.

23. Mrs. Voice did not differentiate between her personal liabilities and her liabilities as sole beneficiary of her father's Will, since she was solely responsible for payment in both instances. She said that estimates of up to £20 million had been given for the total tax liability. Mr. Burns said that the accountants were telling her that she was going to be liable for at least £12 million, between income tax and CTT/IHT, and that it could be as much as £20 million. Mr. Burns suggested that the accountants were simply estimating large numbers to maximise their fees and get free trips to Switzerland.

24. I responded that estimates of £12 million sounded reasonable based on the fact that a capital sum of that amount would have generated enough income to produce (cumulatively) at least £6 million in income tax, penalties and interest if income tax had not been declared and paid over a 22 year period since 1985. Similarly the estimate of £6 million for capital taxes seemed reasonable, taking into consideration the unpaid Capital Transfer Tax of 30%, together with penalties and interest. I agreed that £20 million was a worst case scenario. Mrs. Voice responded that she would not be able to afford a £20 million liability and it would simply bankrupt her. Mr. Silverman then explained that to pay £20 million if treated as a drawdown of income would cost Mrs. Voice a further £23 million, taking into account PAYE/NIC. Mrs. Voice said that at a meeting with Wilson Wright she had been advised to set about raising £12 million. She said that there was "… no chance in hell …" of her being able to do that.

25. It was clear that Mrs. Voice was very anxious indeed about the prospect she was facing. She asked me if I could do anything to help her.

26. I said that in my view £20 million was a figure mentioned by an accountant trying to frighten her, but a tax liability of £12 million was possible, taking into consideration Income Tax and Inheritance Tax. I said that I could investigate and advise her on the approach that the Inland Revenue would take. I could analyse the facts and the applicable tax law, so as to investigate any possible avenue by which savings on the estimated liability could be achieved. I explained that sometimes complex investigations by the Inland Revenue could go on for 3 or 4 years.

27. We discussed how I might be paid for anything I did. I suggested an hourly rate for the time I spent. Mr. Silverman and Mrs. Voice rejected that. Mr. Silverman said that if I thought savings could be achieved, why didn't I invest the time? Mrs. Voice concurred with that view. She said that she could not have two sets of accountants working on the same assignment both being paid an hourly rate. She did not want to take the risk of me spending a lot of time on the matter and rendering a large bill if at the end of it no saving could be achieved.

28. I acknowledged Mrs. Voice's concern. I suggested that my fee should be 20% of the difference between the estimates already given to her by Wilson Wright and the amount which HMRC finally settled for. Mr. Burns said that 20% was too much, and I should make the fee 10% of the savings. Mrs. Voice said she would agree 10% and I accepted that. Then either Mr. Silverman or Mr. Burns, I cannot remember which of them, said that we would be working from £12 million, the lower end of the estimates, as the basis upon which the fee would be calculated. I agreed to that.

29. I then said that mine was a small firm and we could not do without revenue for the whole of the time that the assignment or any subsequent tax investigation was likely to take. I suggested an initial interim payment of £40,000. Mrs. Voice readily agreed, but Mr. Silverman interrupted and suggested £30,000, which I agreed to. I said that in addition to the initial fee, if the disclosure or any subsequent investigation was to drag on I would be seeking further interim payments. Mrs. Voice said that she would review any request as and when it was made.

30. The agreement was, therefore, a £30,000 initial payment, further interim payments if and when agreed, and 10% of the savings achieved from the tax liability estimates of £12 million that Mrs. Voice had been given, payable, less any interim payments, once any settlement had been reached with HMRC. Mr. Silverman said that I would be given full access to the papers."

37. It may be observed that that which Mr. Farrukh contended in the passages quoted had been agreed differed in an important respect from the case pleaded at paragraphs 9 and 10 of the Amended Particulars of Claim. In his witness statement Mr. Farrukh contended that it had been agreed specifically that his fee was to be 10% of the difference between £12,000,000 and whatever sum was in the end necessary to be paid to HMRC. However, in paragraphs 9 and 10 of the Amended Particulars of Claim what was asserted was that the fee was to be 10% of the difference between "the Defendant's liabilities for capital taxes on the gift, income taxes, penalties and interest as estimated by Wilson Wright and the amount of such capital taxes, income taxes, penalties and interest as finally assessed by HMRC" – in other words, it was not pleaded that any specific figure had been estimated. The point was rather underlined by the terms of paragraph 10. It was quite unnecessary to plead which was the relevant estimate, or to what the reference to an estimate by Wilson Wright must have meant, if in truth the figure of £12,000,000 had been mentioned and agreed at the meeting. The case pleaded in the Amended Particulars of Claim seemed to be closer to the case of Mrs. Voice than Mr. Farrukh's evidence, at least in suggesting that no figure of possible liabilities had been mentioned, but rather an estimate, or estimates, of Wilson Wright.
38. I think that it followed logically from Mr. Farrukh's contentions that he had not been provided, between February 2007 and July 2007, with relevant papers concerning Mrs. Voice's problems; that he had not, before the meeting, seen the Draft Note; and that no papers were brought to the meeting in July 2007 by Mrs. Voice, Mr. Silverman or Mr. Burns, that he must be asserting that the figures discussed at the meeting were given to him by one or more of the others attending the meeting. That proposition also inevitably involved the contention that at least one of those attending the meeting who had read the Draft Note had interpreted it, despite its terms, as involving a minimum liability of £12,000,000. However, these matters were not really investigated during the trial.
39. In her witness statement dated 12 November 2012 Mrs. Voice said this about the meeting in July 2007:-

"28. Mr. Farrukh had kept contacting me even before this draft note [that is, the Draft Note] in connection with the disclosure and I found his words comforting as he was so positive that he was an expert and able to handle the whole matter for me. He continued offering suggestions and thoughts on the way in which HMRC should be approached, especially his view that the gift was a gift "with reservation". For example, he prepared a letter of instruction to Wilson Wright on 12 February 2007 setting out his thoughts and reasons why he considered the gift to be made with reservation … I was extremely comforted by Mr. Farrukh's attention as he said he was an expert in the field and could settle the matter at a minimal cost.

29. I had asked Mr. Silverman to keep Mr. Farrukh advised of matters concerning the disclosure as he clearly wanted to become involved, and Mr. Burns suggested that we should formally meet up to see how Mr. Farrukh could help. Having known Mr. Farrukh (and Mr. Burns) for some time, I agreed.

30. This meeting took place at the Hotel Sheraton Belgravia on 5 July 2007 (I don't specifically recall the date, but Mr. Silverman has checked his diary and tells me that's his best information). Mr. Burns was there with Mr. Farrukh, and Mr. Silverman came with me.

31. As I have said, I found the whole HMRC matter distressing, and was in truth becoming quite scared given the lack of information we had been able to obtain. I had never been in this sort of situation before.

32. However, Mr. Farrukh reassured me a lot at the meeting. He said he had dealt successfully with these things before, and could definitely help reduce any liabilities to HMRC. I really took a lot of comfort from that and Mr. Burns confirmed that Mr. Farrukh was an expert and very good at what he did and had helped in similar matters. Mr. Farrukh already knew about Wilson Wright's "draft note" because I remember him commenting that there was lots left for them to do on it but he said he wasn't going to get involved in that for now. He said he would try and reduce whatever figures Wilson Wright came up with, and his fees for any "saving" he made from them would be ten per cent, since he would be making sure I paid the "minimum" to HMRC. He was so confident that he would save me a lot of money that he said that he would do this on a no win no fee basis. He also said that he would need a £30,000 payment on account. Overall, what he was proposing seemed acceptable, as he had been kept in the 'loop' and offering advice since last November, so I agreed.

33. Mr. Farrukh did not bring any engagement letter to the meeting, or send one afterwards, although he did issue an invoice for his £30,000 on account … which I instructed Mr. Silverman to pay, and having discussed this with Mr. Silverman he tells me it was paid promptly later than month. I didn't particularly think about the lack of an engagement letter at the time, as I did not know it was necessary and only now do I realise how important this sort of documentation is. So far as I was concerned, I had just had a very clear and comforting meeting with Mr. Farrukh and had reached an agreement. Mr. Farrukh seemed comfortable with leaving it that way, too."

40. The account given of the meeting by Mr. Silverman in his witness statement, also dated 12 November 2012, was somewhat fuller, but to the same effect as the account of Mrs. Voice:-

"26. Mrs. Voice and I met Mr. Farrukh at the Hotel Sheraton in Belgravia on 5 July 2007. Mr. Burns was also there. I know that there has been a question mark over the date of the meeting, but I am sure that it was 5 July 2007 as I have checked my old diary.

27. Although I don't specifically remember who called the meeting, I do remember that Mr. Burns chose the location as it is one of the nearest hotels to his business premises and he was busy at the time, so it would be easy for him to get to. We were due to meet at 12:30 p.m. [which Mr. Silverman corrected orally to 3:00 to 3:30 p.m.]. However Mrs. Voice and I got caught in terrible traffic between our offices and the hotel and we were a bit late.

28. Despite it being some time ago, I do recall the meeting. Mr. Burns and Mr. Farrukh were waiting when we arrived and we all sat round a small round table in the hotel bar. We ordered a bottle of wine first. It was a screw-top, and as people will with these things Mrs. Voice and Mr. Burns joked about what that might mean for the quality of the wine. This and other light hearted conversation relaxed the table and with the "niceties" over after a few minutes we started to discuss the disclosures to HMRC.

29. As I have said, at Mrs. Voice's instruction I had been keeping in touch with Mr. Farrukh on the matter, so he was generally up to speed regarding the stage we had reached. As I have also said, Mrs. Voice was very concerned about the whole process, but at this meeting she seemed to me to feel "amongst friends". Mr. Farrukh helped her a lot in this regard, being quite charismatic and persuasive in conversation. Mr. Burns bolstered this impression by saying that Mr. Farrukh was, "… Fantastic …." and that he could "… Sort everything out …" for Mrs. Voice. Mr. Farrukh spoke at length to Mrs. Voice in very soothing terms, mentioning that he had "… Dealt with many such cases …" So the net effect was that I sat listening to a very persuasive man comforting a concerned client. At the time, and based on what he was saying, I believed Mr. Farrukh to be a real tax expert. For example, he said that he was obtaining counsel's opinion in connection with disclosure. The general impression he gave to the table was that he was the expert and knew what he was doing.

30. Mr. Farrukh was already aware of Mr. Carmel's "draft note" of 12 June 2007 via my office. He said that the figures from Mr. Carmel were, "… Suggestive …" but that once Wilson Wright were able to prepare more detailed calculations, he would carefully scrutinise them. I specifically recall that he said, "…At this stage, Wilson Wright are some way away from completing their calculations, these are estimates at best …" Indeed Mr. Farrukh was very dismissive of Wilson Wright and the work they had un[der]taken to that point. He was clear – because I remember him saying it – that, "…He would not get involved …" in calculating the figures until Wilson Wright had completed their work. This made complete sense to me because he knew they were already working on this. He didn't say anything like, "… Wilson Wright have now done their estimate, so I will take over from here …"

31. Mr. Farrukh was very persuasive and specific about his fee structure. He said that he was, "… Only willing to take a fee where he was able to effect a saving …" and repeated again and again that Mrs. Voice was, "…His friend …" and that his fee would be "…Ten per cent of the savings I can achieve for you …" As he was saying these things Mr. Burns interjected at various points to say to Mrs. Voice and the table things like, " …Don't worry he will look after you …" and " … He is fantastic, didn't I tell you …?" Mrs. Voice agreed to his proposal of ten per cent of the fees he could save, and since he had been saying how Wilson Wright's draft note was only an estimate and he would only look at their calculations once these were complete, it was clear that this meant he would get ten per cent of the difference from those final Wilson Wright figures and whatever Mrs. Voice's final liabilities to HMRC were. Looking back, I have to say the mood of the meeting was rather spirited and uplifting. Mr. Farrukh had presented himself as somebody who could help Mrs. Voice. I saw his proposed ten per cent fee as fair – Wilson Wright were to continue with their work on the figures and he would then use his expertise to reduce the figures further.

32. Mr. Farrukh went on to say that Mrs. Voice should pay him an advance fee of £30,000 on account for all the work that he would be doing, since he was confident he would make substantial savings for her (he was incredibly confident that he could do that) and Mrs. Voice agreed to this. Nothing at all was discussed about further payments "on account".

33. Overall, the meeting lasted about an hour from start to finish. Mrs. Voice and I took a taxi back to the office and Mr. Burns and Mr. Farrukh saw us off. On the way back, Mrs. Voice seemed incredibly comforted by what we had all discussed and something of a weight seemed lifted from her shoulders after what Mr. Farrukh had said.

34. Mr. Farrukh issued an invoice for his £30,000 on account (plus VAT) shortly after the meeting, on 9 July 2007 … and this was paid on 20 July 2007 by cheque."

41. It was common ground that the involvement of Mr. Farrukh from July 2007 was intended, at least initially, as an adviser of Mrs. Voice acting undisclosed, but in parallel, to Wilson Wright and BLTL. Mr. Farrukh did, in the period up to the end of October 2007, draft letters for Mrs. Voice to send to Wilson Wright putting forward points suggested by Mr. Farrukh. Mr. Farrukh's involvement was revealed to Wilson Wright and to BLTL at the end of October 2007, and he was instrumental in having the services of Wilson Wright and those of BLTL dispensed with by Mrs. Voice by letters which he drafted, but which she signed, dated 16 November 2007. Shortly before dispensing with the services of BLTL Mrs. Voice, at the suggestion of Mr. Farrukh, had instructed Davenports to act as her solicitors in connection with the disclosures under the ODF to HMRC required by 26 November 2007.
42. Some drafts of documents for Mrs. Voice to send to her then advisers were enclosed with a letter dated 12 October 2007 written by Mr. Farrukh to Mrs. Voice. The letter included this paragraph:-

"It is my belief that you will not be liable to pay any Inheritance Tax and thus save £3 million. In terms of income tax, penalties and interest it is my belief that your liability should not exceed £2 million at the very worst and could be as little as £500,000. I have, very subtly, guided your lawyers and accountants to the relevant legal provisions applicable to you and hopefully they will achieve maximum benefits on your behalf. To summarise it is my belief that you would have saved a minimum amount of £4 million and a maximum of £5.5 million once this offshore disclosure matter is closed in November this year. As per our agreement I am entitled to 10% of the saving achieved as my fees and I propose to render my fee note once you have settled your liability with HMRC next month. May I please have your kind approval to this and may I please have these fees settled on presentation."

43. What was set out in that paragraph was not consistent either with the pleaded case of Mr. Farrukh as to what had been agreed in July 2007 or with the evidence in the witness statement of Mr. Farrukh from which I have quoted. The paragraph quoted in the preceding paragraph made no reference either to an amount of £12,000,000 or to any estimate of Wilson Wright, and in particular not to the Draft Note. It simply asserted that Mr. Farrukh had achieved large savings and was entitled to be paid on the making of the disclosure, not on the ascertainment of the figure required by HMRC to be paid in settlement of the disclosure. The reference to IHT was strange, given that what was thought as possibly giving rise to a liability to pay an element of £6,000,000 in the Draft Note was not IHT, but CTT. In cross-examination Mr. Farrukh professed to have intended to include CTT within the reference to IHT, but did not explain why he had not made that clear in the letter. What was contended in the letter dated 12 October 2007 was, quite plainly, totally inconsistent with the case of Mr. Farrukh and his evidence in his witness statement.
44. Mr. Farrukh went on in the letter dated 12 October 2007 to offer to undertake tax planning on behalf of Mrs. Voice for a flat fee of £50,000. He sent a fee note in that sum, plus Value Added Tax, under cover of a letter to Mrs. Voice dated 15 October 2007. That letter made this reference to the work Mr. Farrukh had been engaged in concerning the Swiss Funds:-

"Even then I reduced my fees regarding the Swiss affair from a standard 20% to 10% and the upfront element from £40,000 to £30,000 as I have a huge amount of respect for you and I wanted to demonstrate my abilities to you."

45. To some extent that sentence supported the evidence of Mr. Farrukh in this action, referring to a fee of 20% being reduced to 10%, and a payment on account of £40,000 being reduced to £30,000. However, the reference to Mr. Farrukh wanting to demonstrate his abilities to Mrs. Voice was, perhaps, suggestive of the "no win, no fee" basis of remuneration of which Mrs. Voice and Mr. Silverman spoke in their respective witness statements.
46. The response to the letter dated 12 October 2007 and the submission of the fee note in the sum of £50,000 plus Value Added Tax came in a letter dated 26 October 2007 written by Mr. Silverman to Mr. Farrukh. The letter included the following:-

"In the first instance, I would refer to your letter addressed to Lisa of the 12^th inst. the contents of which I note, however, they differ from what was agreed in terms of the timing of when your fees would be payable.

Although there are no minutes of the meeting held, I clearly recall the way in which you required your fees to be structured.

Lisa agreed to pay you 10% of the savings achieved. You will of course agree that there is no way of addressing at this stage or on November 22^nd exactly what level of saving will be made.

The Inland Revenue will assess the submission and only once the Revenue have confirmed to Lisa that they are satisfied with their findings will we be able to crystallise the position or liability, if any. It would therefore be inappropriate for you to render your fee note until such time as the Revenue have confirmed their position.

…

To sum up Shehzad, you have on more than one occasion advised Lisa and I, that you only wish to take a fee where you are able to satisfactorily effect a saving on behalf of your client. You have gone on to say that although your fees are high, you have a 100% success rate, so for this and other reasons I do not wish to jeopardise either our relationship or your relationship with Lisa and I write this letter to you, without prejudice, in the hope that you will receive it in the vain [sic] that it is being written.

To pay a £50,000.00 fee for inheritance tax advice prior to even having discussed the possibilities with your client, Counsel or HMRC seems truly exorbitant.

Lisa has already paid you a £30,000.00 fee in advance of a successful submission to the Revenue. You have by your own experience knowledge of Lisa's willingness to pay fees as and when they are due …. but only when they are due and not before.

If you choose not to act in this instance as a result of this communication, then you will have misread my good intentions, however in the meantime I am preparing answers to your email of the 15^th inst."

47. Whilst not as comprehensive as might have been helpful – in particular because it made no specific reference to on what basis "10% of the savings achieved" was to be calculated – Mr. Silverman's letter dated 26 October 2007 was certainly not inconsistent with the case of Mrs. Voice before me. There was specific reference to one end of the comparison of savings being however much had to be paid to HMRC. Moreover the reference to Mr. Farrukh saying that he only wished to take a fee "where you are able to satisfactorily effect a saving on behalf of your client" was again suggestive of a "no win, no fee" basis of remuneration.
48. In his response, in a letter also dated 26 October 2007, Mr. Farrukh agreed in terms that what he contended for was a "10% fee of the overall savings achieved due to my intervention on the current Swiss tax affairs". In other words, he there accepted that if he personally achieved nothing, he was entitled to nothing – a "no win, no fee" arrangement. That may be contrasted with the position adopted by Mr. Farrukh in cross-examination, when he contended that he was entitled to ten per cent of savings which he personally had not achieved. Apart from the admission to which I have referred, it has to be said that the letter dated 26 October 2007 which Mr. Farrukh wrote to Mr. Silverman was in terms which strike one as surprising:-

"I refer to your letter of today which I find outrageously offensive. I would like to clarify the matter of my fees once and for all.

1. I always operate with the full knowledge and blessing of my client and always state my responsibilities and my fee structure including terms of payments. Once I have received such approval I move ahead according to the agreement reached. This is exactly what happened in this instance. Under any circumstances I find it disingenuous that a client wishes to vary the terms after the agreement has been reached and when the payment falls overdue. My agreement was reached with Lisa and I can only assume that this letter of yours is written with her authority. Consequently, as far as I am concerned, this agreement in relation to Inheritance Tax Planning and restructuring issues is now null and void. Please do not bother supplying me with any information or documentation in this regard. I agreed a very low fee with Lisa for this work as a gesture of goodwill and fully explained this aspect of the fee as she was seeking a further discount from me. Should you wish to engage me for this work again my fee will now be £400,000 plus VAT and I will require a 30% deposit up front. This matter is no longer negotiable.

2. I am relieved to note that you still agree to my 10% fee of the overall savings achieved due to my intervention on the current Swiss tax affairs. What you have failed to mention is that my fee note will be payable immediately upon presentation. I agree that my fee note will be rendered to Lisa once settlement has been reached with HM Revenue & Customs. Those were the agreed terms and I will not accept any alteration to those terms under any circumstances.

Please confirm by return that you fully understand the contents and implications of this letter and that you have Lisa's full authority in this regard. I will not be meeting Lisa today until I receive such written confirmation.

Whether or not I continue to act for Lisa I reserve my position with regard to my unbilled and unpaid fees. I would like to draw your attention to the terms relating to Constructive Dismissal. In a nutshell, I will not allow any client to evade their fees due to me after they have taken advantage of my knowledge and expertise. If you are in any doubt with regard to my position in this matter please seek immediate independent legal advice."

49. It is, I think, an understatement to comment that the letter seems to betray an obsession on the part of Mr. Farrukh with obtaining payment of very substantial fees, coupled with what can only sensibly be regarded as threats addressed to Mrs. Voice as to the consequences of not paying what Mr. Farrukh demanded when he demanded it.
50. What in the event happened about the bill for £50,000, plus Value Added Tax amounting to £8,750, was that the sum in question was paid in three instalments. Two amounts of £20,000 were paid, on 30 October 2007 and 15 November 2007, respectively, and the balance of £18,750 was paid on 7 November 2007. However, it was agreed that the payment of those sums should be treated as on account of the sums due in respect of the involvement of Mr. Farrukh in relation to the Swiss Funds. Thus, by 15 November 2007 sums totalling £80,000 had been paid to Mr. Farrukh on behalf of Mrs. Voice on account of that matter. The payment of sums totalling that amount by that date was said on behalf of Mr. Farrukh to have some significance, to which I shall come.
51. As I have noted, on the case of Mrs. Voice the document by reference to which it was to be determined whether savings had been effected by Mr. Farrukh when the final sum necessary to be paid to HMRC had been decided was the Wilson Wright Calculation, to the aggregate total of which needed to be added the IHT Liability in deciding any savings. Mr. Farrukh produced two attempts at calculating the amount in respect of which Mrs. Voice was liable in relation to income tax, interest and penalties. The first attempt, which Mr. Farrukh sent to Mr. Silverman as an attachment to an e-mail dated 14 November 2007, resulted in a total liability, net of the IHT Liability, of £2,499,430.73. Mr. Farrukh then produced a revised calculation which he sent to Phebe Phua of Davenports as an attachment to an e-mail dated 21 November 2007. In that revised calculation the total liability was put at £3,160,105.85. That was the figure put forward in respect of the liability of Mrs. Voice to pay income tax, interest and penalties in the disclosure to HMRC made by Davenports on her behalf in a letter dated 23 November 2007, and the value of the cheque enclosed with that letter. In a further letter of the same date written on behalf of the estate of Mr. Rosen the liability in respect of IHT was contended to be £100,638.60, and a cheque in that sum was enclosed. Those being the figures which had been put forward to HMRC, assuming that HMRC accepted the figures contended for as accurate Mr. Farrukh was entitled to £63,944.01 by way of fees under the agreement for which Mrs. Voice contended, being 10% of the £639,440.15 difference between the evaluation of Wilson Wright, £3,799,546, and Mr. Farrukh's revised calculation of £3,160,105.85, the IHT liability not having altered as a result of anything which Mr. Farrukh did. Whether or not HMRC accepted Mr. Farrukh's revised calculation as accurate, it was certainly the case that the fee entitlement of Mr. Farrukh, on the case of Mrs. Voice, was, from 23 November 2007, limited to a sum not greater than £63,944.01. Thus the moment Mr. Farrukh's revised calculation was adopted in the disclosure made under the ODF on behalf of Mrs. Voice it was obvious, to anyone who addressed their mind to it, that he had already been overpaid, if Mrs. Voice's case were sound.
52. So far as is relevant to any issue in this action, the next development, after the submission of the disclosure letters by Davenports, was the receipt by Mrs. Voice of a letter dated 14 July 2008 from HMRC which was in these terms:-

"On behalf of Mr. Cecil Kullman Rosen

On behalf of the Commissioners for HMRC I accept the payment submitted pursuant to your offer submitted under the disclosure reference number stated above."

53. HMRC subsequently sought to go back on that acceptance, but that is not material to any issue in this action. What is material is that Mr. Farrukh wrote a letter dated 31 July 2008 to Mrs. Voice which was in these terms:-

"As you are no doubt aware, the Inheritance Tax matters have now been completed and a formal notification has been received from HMRC. In accordance with our agreement, the balance of my firm's fees is now payable and to that end I am pleased to enclose my firm's fee note for your kind attention. You will no doubt note that I have credited your account with payments received on account totalling £80,000 (£30,000 and £50,000).

Income tax and Capital Gains tax matters are still under review by HMRC. I propose to render my fee [sic] firm's fee note in that respect once that assignment, which was passed on to me by Wilson Wright, has also been concluded.

You mentioned that you have paid my firm a sum of £50,000 for your tax planning. For the avoidance of any doubt, your account has been credited above. Secondly, tax planning was done on your behalf and was not implemented as you were very nervous at that time. Even though the plans met with your approval these were finally abandoned and the window in this respect was formally closed on 5^th April this year. Furthermore, Peter made it very clear that the £50,000 paid to my firm was to be treated as a payment on account in respect of IHT matters. It has been treated accordingly.

Finally, I am shocked and appalled to hear you say that I threatened you. I have always held you in very high regard and simply can not comprehend your unwarranted comments and I am deeply hurt by these. I merely requested the settlement of my firm's fee account in the politest of manners possible. Once again, as per our agreement, may I please have my firm's account settled.

Since I did this letter you have called me again. As discussed, you, me and Ricci will meet tomorrow."

54. Enclosed with the letter was a fee note in the sum of £360,000 for "Sundry advice and attendances in relation to your personal IHT matters" from which a "payment on account" of £80,000 was deducted, leaving a net sum of £280,000. Value Added Tax on that sum at 17.5% amounted to £49,000, so the actual sum payment of which was demanded by the fee note was £329,000.
55. The letter dated 31 July 2008 was a very curious one. It was not the case of Mr. Farrukh in this action that he was entitled to any fee in advance of the settlement with HMRC in respect of all liabilities arising in relation to the Swiss Funds. Consequently there was no justification for seeking to send a fee note simply because the disclosure in relation to IHT appeared to have been accepted by HMRC. No explanation whatsoever was offered in the letter as to the calculation of the fee alleged to be due of £360,000, and it was not possible, without some explanation, to work out how it had been calculated. £360,000 is 10% of £3,600,000, but £3,600,000 was not a figure which had featured up to this point as an actual or potential liability of Mrs. Voice or the estate of Mr. Rosen. The disclosure in relation to IHT had calculated the liability at £100,638.62, Mr. Farrukh had not sought to alter the original calculation made by BLTL in that sum, and it was 27.95% of the fee sought. Mr. Farrukh sought, in cross-examination to conflate the liability in relation to IHT with the liability in relation to CTT, nil, and to suggest that somehow because the CTT had been left out of account in making disclosure to HMRC and that had not been challenged by HMRC when accepting the disclosure from the executors of Mr. Rosen, that entitled him to a fee. However, how one got to the figure of £360,000 as being the fee did not emerge at all clearly. In the end Mr. Farrukh contended that the reason why the figure of £360,000 seemed to bear no resemblance to any actual or potential liability thus far identified was that his fee was discounted, notwithstanding that he made no reference to any such discount in his letter. Per contra, the letter spoke of the fee being "the balance of my firm's fees".
56. In his witness statement dated 12 November 2012 Mr. Farrukh referred, at paragraph 120, to his letter dated 31 July 2008 and offered this explanation of the calculation of £360,000:-

"I capped the saving on Inheritance Tax at £4.53 million, as against the Wilson Wright estimate of £6m in June 2007. Of that capped fee of £453,000 (being 10% of the £4.53m) I deferred £93,000 until the Income Tax matters were also agreed with HMRC, deducted the £80,000 already paid, and billed Mrs. Voice the net figure of £280,000 plus VAT on account of Inheritance Tax matters. This was clearly explained in my letters to Mrs. Voice and I was confident that the eventual liability would be at least £3.6 million less than Wilson Wright had estimated including penalties and interest."

57. That was an unusual explanation, given that the letter dated 31 July 2008 contained no reference to an amount of £4,530,000, or to an amount of £453,000 or to a deferment of an amount of £93,000. If Mr. Farrukh was seeking to suggest that the figures set out in the passage quoted was clearly explained in the letter dated 31 July 2008 or any letter which he wrote to Mrs. Voice earlier than that, I am afraid that that contention was risible.
58. At paragraph 121 of his witness statement Mr. Farrukh went on:-

"Mrs. Voice responded by telephoning me again on the same day and asked that I attend a meeting at her house with Mr. Ricci Burns. The meeting took place on 1 August 2008. Mrs. Voice apologised for what she had said. She said the bill was fine, and she asked that I gave her time to pay. I agreed. She said she would contact me in the near future with her proposals, and that was the end of the conversation on the matter of fees."

59. The allegation that Mrs. Voice had agreed the fee of £329,000 was contained in Mr. Farrukh's letter to Mrs. Voice dated 12 August 2008. That letter was in these terms:-

"I write further to my letter dated 31^st July and our subsequent meeting on Friday 1^st August. At this meeting you accepted our bill of charges (Fee Note 201) regarding my assignment on Inheritance Tax (IHT) matters which have formally been concluded by HMRC. You promised to revert back to me last week in respect of your proposals towards settlement of our fee account. Taking into consideration the fact that I have already deferred £93,000 of billing regarding IHT matters to allow you more time I feel very disappointed that I have not heard from you.

In addition to this it is important to remember there will be a further bill in respect of Income Tax matters which I hope will be concluded satisfactorily this month. According to Leslie HMRC are ready to meet with us some time this month, this will require more time input and work from me if we are to resolve this favourably with HMRC.

I am afraid Peter is wrong in his assumption that the IHT matters and Income Tax matters are one and the same. I was commissioned initially on IHT matters as evidenced in the letter of 26 October 2007 and it was not until the 15 November that I was instructed with regards to the Income Tax assignment. These are two very separate assignments and should therefore be treated as such. The outcome of negotiations with HMRC regarding Income Tax matters has nothing to do with IHT matters which are now concluded and you accepted the fees are due in this respect. I have and will always continue to give you my full support but it is unfair to expect me to carry on working for you without having my account settled.

Under the circumstances I must ask for an immediate meeting to obtain a payment on account and to hear your proposals for the balance of the fee account which I expect to be settled in full as soon as possible. I would really like to get this matter cleared up so I can concentrate on the Income Tax negotiations with a clear head to ensure the most positive outcome. I severely detest arguments over fees which is why I always pre-agree fees before commencing work. I would like to re-iterate my full support to you as a client; by the same token I expect the full respect for my work and loyalty and the honouring of my fee notes."

60. It seemed ironic, given that in this action Mr. Farrukh accepted that in fact his entitlement to a fee depended upon the complete resolution with HMRC of liabilities in respect of the Swiss Funds, that he contended, in the final paragraph of his letter dated 12 August 2008 that, "I always pre-agree fees before commencing work" because "I severely detest arguments over fees". Thus what he asserted in the letter Mr. Silverman was wrong about, Mr. Farrukh accepted in this action Mr. Silverman had been right about. It was therefore, on any view, Mr. Farrukh who was generating a dispute about fees. In cross-examination Mr. Farrukh agreed that his "splitting" of entitlements to fees between what he called IHT, but which in fact he asserted included CTT, and income tax matters was not justified and that it was a nonsense. What Mr. Farrukh said in cross-examination justified this nonsense was, "I was angry". The effect of his anger, he told me, was that he made "an error".
61. Bearing in mind that Mr. Farrukh said in his witness statement that the reason for deferring payment by Mrs. Voice of £93,000 was pending the resolution of the balance of the liabilities with HMRC, it seemed noteworthy that in the letter the reason for the deferment was said only to be "to allow you more time". The letter dated 12 August 2008 gave no explanation of the calculation of the £93,000, or of the calculation of the £360,000. What it did seek to make clear was that, far from the sum of £360,000 being, as originally described, "the balance of my firm's fees", actually there would be "a further bill in respect of Income Tax matters".
62. A meeting took place between Mr. Farrukh and Mrs. Voice on 19 August 2008 at which, it was common ground at the trial, Mrs. Voice agreed to pay Mr. Farrukh £100,000. It was on this occasion, according to Mr. Farrukh, that the first variation to the July 2007 agreement was made. At paragraph 124 of his witness statement dated 12 November 2012 Mr. Farrukh said about the meeting:-

"In fact Mrs. Voice did not call me but Mr. Burns did, and a further meeting on 19 August was arranged, attended by me, Mrs. Voice and Mr. Burns. I said that the inheritance tax submission has been completed satisfactorily, and I would welcome payment of my fees. I commented that I was confident that the Income Tax disclosure would similarly be accepted. Mrs. Voice was pleasant and hospitable. She said that she was sorry about her reactions. She asked if I could give her some time to arrange payment. She said that she would probably have to sell something, and I believe that she had in mind a house in Florida. She said she would pay £100,000 and make more payments of a similar amount at intervals of two to three months. Mrs. Voice also informed me she was going on holiday and would instruct Mr. Silverman to effect payment. It was clear that Mrs. Voice had fully accepted the Claimants [sic] invoice 0201, and that a further £93,000 was billable on the Inheritance Tax matter and was only being deferred until HMRC had agreed the Income Tax position. The meeting ended and we all parted on good terms."

63. Although it was said that Mr. Ricci Burns had attended the meeting at which the oral variation of the original agreement of July 2007 was made, as Mr. Burns was not called to give evidence at the trial, his position as to what, if anything relevant, happened at that meeting, was not known.
64. Mr. Farrukh wrote an e-mail to Mr. Silverman on 19 August 2008. If it had been agreed on that date that Mrs. Voice would pay the fee note enclosed with Mr. Farrukh's letter dated 31 July 2008, or that the terms of the July 2007 agreement had been varied in discussion with Mrs. Voice, one might have expected that Mr. Farrukh would have mentioned it in his e-mail. He did not. All he actually wrote, apart from giving the claimant's bank details, was:-

"Further to my meeting with Lisa today she has agreed to make a payment in the sum of £100,000 on account of my firm's fee note. I understand from Lisa that she has instructed you to transfer the funds to my firm's account by the end of this month and requested me to provide you with our bank details which are as follows."

65. Mrs. Voice did, indeed, give instructions to Mr. Silverman to pay £100,000 to the claimant. Mr. Silverman, however, prevaricated. He considered that Mrs. Voice should not have agreed to make the payment. In an e-mail to Mr. Farrukh dated 1 September 2008 he said that he was not in funds to make the payment. Mr. Farrukh's reaction was intemperate. In an e-mail also sent on 1 September 2008 he wrote:-

"I am very disappointed with your reply. As I understand from Lisa the money is on deposit.

I strongly suggest that you make arrangements for payment tomorrow.

It is not my concern if you have to withdraw money from the deposit or sell some shares in Emerald Energy.

I have been far too generous with my terms and I will not allow any abuse in this respect.

If I do not receive £100,000 in cleared funds by close of business tomorrow, I will instruct solicitors to issue a statutory demand for the whole amount on my firms [sic] outstanding account. Which will include the deferred items that I have not billed for as stated in my earlier letter.

It is extremely disingenuous of you not to make arrangements when you knew very well that these monies were due. My patience has been exhausted and I will be obliged if you save me the embarrassment of commencing legal proceedings.

Finally, please ensure that Lisa is fully aware of what is going on between you and me."

66. The e-mail made no reference to Mrs. Voice and Mr. Farrukh having agreed a variation to the July 2007 agreement. One might have expected it to have said something along the lines, "At my meeting on 19 August 2008 I agree with Mrs. Voice that she would pay £x in respect of my fees, and unless I receive £100,000 immediately I will sue for the entirety of the agreed fees", but there was nothing like that. Mr. McCue pointed out in cross-examination of Mr. Silverman that, as, on the case of Mrs. Voice, Mr. Farrukh had already been overpaid, it was curious that Mr. Silverman did not make that point as the reason for not making a payment, rather than say that he was not in funds to make the payment. Up to a point that was a fair observation. Mr. Silverman agreed that the fact that Mr. Farrukh had been overpaid was an obvious reason to give for not making any further payment. However, I think that it has to be remembered that Mr. Silverman had actually been instructed by Mrs. Voice to pay the £100,000. Although, as Mrs. Voice herself said in cross-examination, the position of Mr. Silverman not to pay was correct, because nothing was due, actually he was disobeying her direct instructions to make a payment. In human terms one can well imagine that there was a temptation to Mr. Silverman, in order to act in what he conceived to be the best interests of his employer, but contrary to her express instructions, to be somewhat opaque as to why he had not complied with her orders.
67. Mr. Farrukh was not happy. He pressed Mr. Silverman. In an e-mail of 4 September 2008 Mr. Silverman changed tack, and asserted that nothing further was due until matters had been settled with HMRC. Mr. McCue again pointed out that a more obvious point would have been that nothing was due in any event because Mr. Farrukh had been overpaid. What Mr. Silverman said in his e-mail of 4 September 2008 was:-

"I refer to our most recent e-mail communication, and more importantly, the letters that were sent out to HMRC by Davenport Lyons yesterday.

I appreciate that you yourself do not believe that the current situation has altered in any way and that an interim payment is still due to you. We started crossing swords over this issue back in October of last year, as you will recall your letter of 12 October 2007 stated, and I quote "I propose to render my fee note once you have settled your liability with HMRC next month". I responded to you on 26 October last stating, and I quote "it would be inappropriate to render your fee note until such time as the Revenue had confirmed their position". Your response of the same date confirmed my understanding.

At no time during this communication did we differentiate between IHT matters of Lisa's father's Estate and Lisa's own personal declarations.

I am of course aware that you and Ricci have met with Lisa, explained your understanding and agreed that she should part with a further £100,000 on account. It is your prerogative to request the money. However it is my view that your fees are payable (and I quote from your letter of 26^th October last) "once settlement has been reached with HMRC". These were your terms which you were not prepared to alter. (indeed you have already received £80,000, so the agreement has already been altered.)

This whole matter has not been settled.

Finally, please note that this communication is my personal view based on evidence before me."

68. Mr. Silverman was not asked about his observation in this e-mail, "indeed you have already received £80,000, so the agreement has already been altered", so he made no comment about it in cross-examination. However, it is difficult to see what he meant by it unless either it was that only a payment of £30,000 on account had been agreed or that the sums already paid exceeded what was due. It is unlikely that it was the latter, unless he had forgotten the comment when giving his evidence, for what was being put to him was that that was the very point which he had not made.
69. After a further communication from Mr. Farrukh Mr. Silverman wrote an e-mail dated 8 September 2008 which was in these terms:-

"I regret my position here but have to reiterate the contents of my email of the 4^th inst, of which your reply of the same date makes no mention of [sic].

You need to re address the specific point of when payment is due to you.

This was set and I would repeat your email communication of 26^th Oct 2007

"once settlement has been reached with HMRC"

SETTLEMENT HAS NOT BEEN REACHED.

It will be.

If Ricci contacts me today, I will forward to him the email communication to which I continue to refer to [sic].

That is all I will be able to offer him, as his involvement has been limited to a verbal dialogue only.

I am finding your communication quite threatening, almost bullying, please be more understanding of my position.

I am unable to arrange the transfer of funds to your designated account today.

Finally would you refer me to the communication relating to the point that there was a distinction between IHT & IT matter. It would help resolve a number of points for me."

70. The £100,000 never was paid and there was no claim for it in this action. What did happen at the beginning of November 2008 was that Davenports were notified by HMRC that it was intending to conduct an investigation into the affairs of Mrs. Voice under what was called Code of Practice 9, which bore the title, "Civil Investigation into Cases of Suspected Serious Fraud". Mrs. Voice was formally notified of this development by HMRC in a letter dated 18 November 2008. In the event that investigation was resolved satisfactorily from the point of view of Mrs. Voice. However, at the time it was a most unwelcome, and possibly sinister, development. Mr. Farrukh became involved in that investigation on behalf of Mrs. Voice. In order to secure his services Mrs. Voice agreed to settle a fee note dated 14 November 2007 in the sum of £15,000, plus Value Added Tax, described as relating to "Sundry advice and attendances in relation to your personal taxation matters". That sum was paid, as was a further sum of £10,000 plus Value Added Tax, which was the subject of a fee note dated 25 February 2009, for work described in the fee note as "Sundry advice and consultancy regarding company affairs". It was subsequently agreed that these sums would be treated as paid on account of that which was due to Mr. Farrukh pursuant to his engagement agreed initially at the July 2007 meeting. Mr. McCue emphasised, in his closing submissions, that these sums were not due, on Mrs. Voice's case, in respect of the engagement agreed in July 2007, at the time the payments were made. That was so, but, at the time the fee notes were rendered and paid they were not attributed to the original engagement, but to the assistance which Mr. Farrukh agreed to provide concerning the Code of Practice 9 investigation. The fact that the parties agreed subsequently that these sums be treated as paid on account of the original engagement was thus a rather equivocal matter. These sums of £15,000 and £10,000, added to the original payment on account of £30,000 and the payments in October and November 2007 totalling £50,000 plus Value Added Tax, constituted the agreed total of £105,000 paid on account of Mr. Farrukh's original engagement to which I have already referred. Mr. Farrukh explained the position in relation to the fee note of 14 November 2008 in an e-mail to Mr. Silverman dated 18 November 2008:-

"With all due respect my assignment was to assist Lisa in respect of IHT disclosure. My second assignment was to assist Lisa with Income Tax/CGT disclosure since your illustrious Barrie made a few mistakes in respect of drawings. My assignment was not to be the lead accountant in a full fledge [sic] HMRC investigation. This fee note sent to you was fully explained to you and is nothing to do with disclosure matter assignments. If it is not getting paid please do not expect me to do work on this. I already have spent 42 hours on this matter and I will not work for free. I will be billing Lisa on regular intervals based upon my time spent and once again these bills relate to HMRC investigation."

71. The genesis of the second variation to the agreement alleged appeared to be in Mr. Farrukh inviting Mr. Julian Burns to prepare a retainer letter for Mr. Farrukh to send to Mrs. Voice. Mr. Farrukh gave his instructions to Mr. Julian Burns in an e-mail dated 7 July 2009. The instructions which he gave were:-

"My assignment with Lisa is two folds [sic]. One relates to Inheritance tax and the other relates to income tax.

Inheritance tax liability would have been £4.2 million and she settled for £100,000. My fee on conclusion of this matter would be £410,000 plus VAT. As far as I am concerned I have proved this matter and Leslie should be able to fight this all the way. HMRC have no alternative but to accept the facts as they stand.

Income tax liability has been assessed by HMRC to the tune of £9 million and estimated by Wilson Wright at £5.7 million plus when they threw in the towel and I took over. We have settled this at £3 million and I believe that this is very defendable. My fees are based on the lower figure of £5.7 million and thus amount to £270,000 plus VAT.

I will deduct all payments made on account in respect of these fees. What I want to achieve is a confirmation from Lisa about the outstanding fee notes subject to HMRC agreement of overall liabilities. I also require monthly payments on account of £16000 plus VAT as we discussed. This reflects about 50 hours that I am averaging on Lisa's affairs every month and works out at less than £350 per hour. On contingency basis I normally charge 250% of my normal rates which I am not doing here."

72. The instructions which Mr. Farrukh gave were very difficult to understand. He seemed to be speaking about actual IHT, and not including CTT, in identifying a liability of £4,200,000, for he mentioned specifically the settlement of £100,000, which related to IHT, albeit that no settlement had actually been reached at the date of his e-mail, HMRC having contended that the apparent settlement had been in error. As I have already pointed out, the CTT liability was either nil or a figure of the order of £6,000,000, so £4,200,000 cannot have included anything in respect of CTT. But on no possible view had the potential liability for IHT been £4,200,000. No figure of £9,000,000 in respect of income tax liabilities had ever been identified by anyone prior to these instructions. The closest one could come was to a protective assessment made by HMRC on 1 April 2008 of £8,100,000. At paragraph 163 of his witness statement dated 12 November 2012 Mr. Farrukh explained that by saying in his instructions to Mr. Julian Burns "estimated by Wilson Wright at £5.7 million" what he actually meant was the actual assessment of Wilson Wright of £3,800,000 adjusted by Mr. Farrukh by addition of £1,900,000 in respect of what he perceived to be errors in the calculations of Wilson Wright. However, how that was material, when Mr. Farrukh's own calculation was of £3,160,105.85, was not explained.
73. Mr. Julian Burns did prepare a draft retainer letter and Mr. Farrukh sent it to Mrs. Voice dated 8 July 2009. The letter included:-

"I am writing to confirm that we are continuing to act for you in connection with the above matters. The purpose of this letter is to reconfirm our original agreement. …

Prior to our involvement in this matter it was estimated by your prior accountants, Wilson Wright, that your potential liability to HMRC was £4.2m in relation to IHT liability and £5.7m in relation to IT liability, giving rise to total potential liability of £9.9m.

At the outset of this firm's engagement on this matter in July 2007 we agreed that this firm, in consideration for our involvement in this matter, would be entitled to a payment representing 10% of any saving from £9.9m, payable on acceptance by HMRC of any offer any conclusion [sic] of this matter (Final payment), plus VAT at the applicable rate and disbursements…."

74. It is noticeable that what was contended was that the terms set out were "our original agreement". There was no reference to any alleged first variation of the original agreement in August 2008. The contention that Wilson Wright had estimated potential liability in respect of IHT at £4,200,000 was simply untrue, as was the contention that Wilson Wright had estimated potential liability in respect of income tax at £5,700,000. It had not before been suggested that what had been agreed at the meeting in July 2007 was that Mr. Farrukh's fees were to be "10% of any saving from £9.9m", and it was not his evidence at the trial that that was what had been agreed – in his witness statement he spoke of the upper limit for the calculation being agreed at £12,000,000.
75. Mrs. Voice's reaction to the letter dated 8 July 2009 was to write a letter dated 16 July 2009 to Mr. Farrukh which was in these terms:-

"I hope that you and your family are well.

Why has the original agreement between us altered?

You have already received numerous payments from me.

I am confused by your letter.

We already have an agreement between us, that you shall receive your payment upon HMRC being finalised."

76. Whilst indicating dissent from what Mr. Farrukh was contending had been the original agreement, Mrs. Voice did not take the point that he had, on her case, been overpaid.
77. Mr. Farrukh contended that he had not received a reply to his letter of 8 July 2009 by the date of his letter to Mrs. Voice of 21 July 2009, and from the points which he made in that letter, that appeared to be so:-

"Leslie requires me to attend the meeting with HMRC which has yet to be fixed. It is imperative that I attend all future meetings in relation to your tax affairs to ensure that I am up to speed on everything. My attendance at these meetings is in your best interest.

I draw your attention to my letter of 8 July to which I have not yet received a reply. I cannot see what issues you may have with it as it simply re-iterates previous agreements, given that time had moved on so much since then without any formal resolution. However, if you do have any issue with the contents of the letter then please bring it to my attention. I would be happy to meet with you at the earliest opportunity to discuss them."

78. It was not in dispute that Mr. Farrukh did receive the letter dated 30 July 2009 which Mrs. Voice wrote in answer to that letter. Mrs. Voice said in her letter:-

"I hope that you and your family are well.

In reply to your letter I found it most presumptuous and intimidating. We had an agreement between us on my situation being finalised and completed by the Inland Revenue.

I hope this is now resolved and I look forward to seeing you and JJ [that is, Mr. Julian Burns] next week."

79. A meeting did take place between Mr. Farrukh and Mrs. Voice, it would seem on 3 or 4 August 2009. 30 July 2009 was a Thursday, and in her letter of that date Mrs. Voice spoke of a meeting the following week, the week beginning Monday, 3 August 2009. In a letter dated 6 August 2009 to Mrs. Voice Mr. Farrukh referred to a meeting "the other day", so presumably not the previous day, 5 August. Mr. Farrukh wrote two letters dated 6 August 2009 to Mrs. Voice. Before coming to them it is convenient to set out his account in his witness statement dated 12 November 2012 of the meeting and the circumstances in which the longer letter dated 6 August 2009 came to be produced:-

"176. The meeting did take place in the following week as scheduled. I attended about 30 minutes early and spoke to Mrs. Voice about payment of my fees. She said that a payment on account of £16,000 monthly was like another mortgage and she was not having it. She asked how I had come up with the figures and I explained my calculations, as I have set out above. The £4.2 million value was covered quite quickly. The £5.7 million took more time to explain. After going through it Mrs. Voice understood and accepted what I said. She then struck through the paragraph on the draft that we were looking at that related to the fee on account of £16,000 which she had referred to as another mortgage. I said that I would be giving credit against the baseline value of £4.2 million for the payment of £105,000 that she had paid to the Claimant so far.

177. I also said that the payment for Inheritance Tax of £100,638 had been at the request of Wilson Wright & Co. My firm view was that no IHT payment was necessary because the gift had been conditional in 1985. The original disclosure by Wilson Wright & Co. on 19 February 2007 had referred to the gift being unconditional, and they had thought that the IHT payment was necessary to ensure consistency with the original disclosure.

178. For those reasons I said that for the purposes of calculating my fee account the IHT payment of £100,638 should be disregarded.

179. I then addressed the question of the payment for Income Tax. I said that I proposed for the purposes of thinking about my fee to round down the payment made to HMRC to £3 million. I said that I wanted to keep life simple and I thought that was justified considering that I had given her a credit for £25,000 relating to the fee that she had agreed to be payable for work done relating to the HMRC enquiry (outside the scope of work on the HMRC disclosure). That had been the fee that had been agreed in November 2008, which had been subsequently invoiced and paid in two instalments.

180. I said that the purpose of all this was to try to reach agreement on where we stood and what should be paid. In June 2007 the estimate from Wilson Wright & Co. which had caused her to approach me in the first place referred to possible liabilities in the region of £12 million, and at the time I had been told that she had been advised to start raising £12 million. The proposal that I was making to her therefore offered her a substantial discount from a calculation of fees due to the Claimant based on 10% of savings achieved between the estimates given by Wilson Wright & Co. in June 2007 against tax actually paid.

181. I was trying to draw a line in the sand. I did not want to have any more discussions about discounts. What I was offering was a substantial discount against calculation based upon Wilson Wright & Co.'s estimate given to Mrs. Voice in June 2007. I therefore proposed that we agree on a fee to be paid to the Claimant in the sum of £585,000 plus VAT which I had explained, and Mrs. Voice understood as:

Baseline £9.9 million

deduct tax paid £3 million

deduct payment already made to the Claimant £105,000

result £5.85 million

10% £585,000

182. As we had been speaking Mrs. Voice had been annotating her copy of the draft engagement letter, and then she signed it. But it had so many annotations I said that I would prepare a clean copy, and bike it over the following day. Mrs. Voice kept the annotated copy. I have not seen this copy in the Defendants [sic] disclosure documents. With hindsight I very much regret not just accepting the signed copy with all its annotations.

183. Accordingly on 6 August 2009 … an amended version of the engagement letter was sent out. I had requested my colleague, Melissa Wells, to send the amendment letter out but I failed to ask Melissa to change the reference from £4.2 million to £4.1 million to take account of the settlement payment of £100,000, and I omitted to ask Melissa to record the fee value that I had agreed with Mrs. Voice of £585,000. For the record, I am not in the habit of sending out amended letters just for the sake of it. The letter was sent after my meeting with Mrs. Voice and with the mutually agreed amendments which were effectively discounts on my originally agreed fees."

80. That account had a number of remarkable features. It was not suggested that Mr. Julian Burns had been present during the relevant conversation or had been told about it. Rather Mr. Farrukh's version was that he had deliberately attended early to deal alone with Mrs. Voice in relation to fees. Although Mr. Farrukh contended that Mrs. Voice had made notes on the letter dated 8 July 2009, the original version of a so-called engagement letter, it had never, before it appeared in his witness statement dated 12 November 2012, been contended by or on behalf of Mr. Farrukh that Mrs. Voice had signed the letter dated 8 July 2012 as amended by her. It was not obvious why she would have done so unless, which Mr. Farrukh did not contend, she was intending to hand it to him as evidence of her agreement to the terms of the letter as amended. Mr. Farrukh suggested that he had said to Mrs. Voice that he would "bike [an amended version of the letter dated 8 July 2009] over the following day", yet, as I have already remarked the shorter letter which Mr. Farrukh wrote which was dated 6 August 2009, like the so-called amended version of the engagement letter, referred to a "meeting with you the other day", not "yesterday". And to cap it all the longer letter dated 6 August 2009, which, on its face was a re-dated version of the letter dated 8 July 2009 and in terms identical to it, save that a paragraph in relation to payments on account of £16,000 per month had been omitted, failed to mention what Mr. Farrukh contended was the really important part of the meeting from his point of view, the agreement of Mrs. Voice to pay a fee of 10% of £5,850,000. The longer letter dated 6 August 2009 retained the phraseology that, "The purpose of this letter is to reconfirm our original agreement." It made no reference whatsoever to any discussions about, or agreement upon, the terms of the letter at a meeting between Mr. Farrukh and Mrs. Voice.
81. The shorter letter dated 6 August 2009 written by Mr. Farrukh to Mrs. Voice was in these terms:-

"It was a pleasure meeting with you the other day.

In reference to our discussions, please find enclosed two copies of the amended letter of engagement, one copy for you to sign and send back to me, the other copy for you to keep for your records.

Regarding the question of interim payments, as discussed, I am considering the level of payment on account required and intend to render a fee note in early September when you hope to be in funds.

I trust everything is now to your satisfaction regarding these matters and look forward to a swift and successful outcome."

82. The third paragraph of that letter was not even consistent with the suggestion in the witness statement dated 12 November 2012 of Mr. Farrukh at paragraph 176 that he had accepted in discussion with Mrs. Voice her non-agreement with paying sums on account.
83. Mrs. Voice said, simply, about the longer letter dated 6 August 2009 from Mr. Farrukh, at paragraph 52 of her witness statement:-

"When I did not sign this letter [that dated 8 July 2009], on 6 August 2009 Mr. Farrukh had a second version of his engagement letter delivered to my house in virtually identical terms …. That letter which was very similar to the previous one but since it contained a completely untrue version of our agreement I had no intention of signing and forwarded it to Mr. Silverman at my office in Lisson Grove."

84. In a letter dated 21 August 2009 to Mrs. Voice Mr. Farrukh wrote:-

"I refer to my letter of 6 August and am surprised that you have not yet returned a signed copy of the letter of engagement. I understood it to be all verbally agreed after our meeting and now require your written confirmation by return.

I have given the question of interim payments much thought and now enclose a fee note in the sum of £25,000 plus VAT. This is payable immediately in accordance with our agreement of November 2008 (copy enclosed). The amount will of course be deducted from the overall amount owed by you to my firm which currently stands at £585,000 plus VAT."

85. Again the terms of the letter were interesting in the light of the case of Mr. Farrukh and his evidence at the trial. He did not assert that Mrs. Voice had signed anything at the meeting to which he specifically referred – rather he contended that he understood the terms of the letter dated 6 August 2009 to have been verbally agreed, notwithstanding that it did not mention the one figure which Mr. Farrukh contended had been specifically agreed, a fee of £585,000. So far as any document went, that figure of £585,000 first appeared in the letter dated 21 August 2009. However, it was not there described as a fee which Mrs. Voice had agreed potentially to pay for Mr. Farrukh's services in connection with dealing with the disclosure of the Swiss Funds when the HMRC investigations were concluded, but rather as a sum already due. Moreover, since it was an amount "owed by you to my firm [at] which [Mrs. Voice's liability] currently stands", the plain suggestion was that it was an amount which could increase.
86. Mrs. Voice prepared a reply to Mr. Farrukh's letter dated 21 August 2009 which she did not send, but which at least indicated her thinking at the date she wrote it, 28 September 2009:-

"Thank you for your letter of the 21^st August.

I cannot see that I owe you any further monies and I consider that I have overpaid you so far."

87. By the beginning of October 2009 it seems that Mr. Farrukh was becoming exasperated by the continued failure of Mrs. Voice to sign and return a copy of his letter dated 6 August 2009. In a letter dated 2 October 2009 to Mrs. Voice Mr. Farrukh wrote:-

"I write further to my letter of 21 August. It is patently obvious that you have no intention to sign our letter of engagement which has been verbally agreed several times. It is also patently obvious that you have no intentions of making any payments on account.

Your lawyers, Davenport Lyons, have contacted me in respect of your case however, without a signed contract and a payment on account of £50,000 plus VAT I will not conduct any further work on your behalf.

I also require your written confirmation that you have taken independent legal advice in respect of my letter of engagement.

Finally, I will notify your lawyers that I intend to exercise a lien on all my work and intellectual property."

88. Mr. Farrukh did not identify any of the "several times" when he contended that Mrs. Voice had "verbally agreed" the letter of engagement, other than at the meeting on 3 or 4 August 2009. His letter dated 2 October 2009 took no account of the fact that, on his own case at trial, the version of the letter of engagement dated 6 August 2009 omitted important provisions, in particular an agreement to pay a fee of £585,000.
89. The involvement of Mr. Farrukh in Mrs. Voice's affairs came to an end in the circumstances recorded in an e-mail which he sent to Mr. Leslie Powell of Davenports dated 26 October 2009:-

"Thank you for your email, the contents of which have been noted. It's with regret that I have to inform you that, at present, I am not conducting any further work for Mrs. Voice. My position is very awkward due to compliance matters, as Mrs. Voice has not returned my signed letter of engagement. The letter of engagement effectively puts all matters in relation to my firm's fees beyond doubt.

Consequently, until this matter is resolved, please be advised that I will not be attending any meeting with HMRC and no one will be making any representations on behalf of my firm and me. Furthermore, I am exercising a lien on all work and intellectual property subject to rules and guidance by ICAEW and in accordance with law in England and Wales. Please take notice accordingly and ensure that HMRC are aware of this change. All rights of my firm and myself are fully reserved."

90. The same day Mr. Farrukh wrote to Mrs. Voice a short letter, in these terms:-

"Please find attached herewith a copy of my email to Leslie which is self explanatory.

My firm and I continue to hold you responsible for our unpaid fees as per our original agreement. Please take notice accordingly."

91. So Mr. Farrukh was still contending that his entitlement to fees arose under his original agreement with Mrs. Voice, and that there were then fees outstanding to be paid.
92. After Mr. Farrukh ceased to be involved in the resolution of the difficulties of Mrs. Voice, and those of the estate of Mr. Rosen, with HMRC there were, nonetheless, some exchanges concerning what had been agreed with Mr. Farrukh about fees the contents of which it is appropriate to notice in the context of the issues in this action.
93. Nearly three years after the original agreement in July 2007 Mr. Silverman wrote an e-mail dated 18 June 2010 to Mr. Farrukh in which he said:-

"I have looked at the correspondence over the past 3 years and find that you first became involved in the matter after Lisa, through her accountants, had made a disclosure to HMRC in connection with funds given to her by her father from a Swiss Bank account on the occasion of her marriage.

Lisa's accountants, Wilson Wright & Co., had investigated the information she had supplied to them and had prepared a guestimate of the amount of tax and penalty that should be paid, both by her and the executors of her late father's estate. At a meeting with Lisa, Ricci Burns and yourself you offered to look into the matter and make recommendations which you were certain would result in a settlement with a substantial saving of tax.

You advised that your fee would be 10% of the saving of the difference between that estimated by Wilson Wright & Co. and that effected by yourself. You advised that this was a 'No win no fee' deal as you were confident of success. I believe, one other condition was that you wanted the solicitors involved to be Davenport Lyons.

You then had a series of meetings with Lisa and after consideration and Counsel's opinion presented a history of events which, in your opinion, gave rise to the gift on Lisa's marriage to be 'a gift with reservation', which would reduce the overall liability. At the present moment although HMRC have written to say that the enquiry with regard to the executors of the late C K Rosen has been closed, they are now saying that the letter was written in error.

At the present moment despite your original offer of a 'no win no fee' charge you have been paid (including VAT) £146,250.

HMRC are now conducting an in depth investigation in this matter and have subjected Lisa to a Code 9 interview with a lot of follow up questions.

This matter is far from finished and your constant requests for payment of supposed fees is quite unprofessional and irritating. Any fees due to you will be paid when HMRC have completed their investigation and a settlement is reached. The fee will be computed on the basis mentioned above and paid on receipt of an agreed account and the amount already paid deducted.

Lisa and I think that this sets out the position herein and see no reason to have any further meetings concerning fees or otherwise unless any further information is required concerning the HMRC investigation."

94. Mr. Silverman accepted in cross-examination that he was in error in asserting in that e-mail that the engagement of Davenports had been a condition of the original agreement. He did not make the point which, on Mrs. Voice's case at the trial he might have made, that on any view Mr. Farrukh had been overpaid. Rather, the terms of his e-mail seemed to contemplate that, on settlement of matters with HMRC, some further sum would be due to Mr. Farrukh.
95. Mr. Farrukh replied to Mr. Silverman's e-mail dated 18 June 2010 in a long e-mail dated 21 June 2010. He made a number of points, none of which was that the original agreement had been varied, or that Mrs. Voice had signed a version of the letter of engagement which she had annotated, or that she had agreed to a fee of £585,000. The e-mail did include these passages:-

"2. You also fail to mention the level of estimates of tax liability calculated by Wilson Wright. These ranged from some £6 million to £20 million. The average potential liability would be exactly £13 million which suggests that my intervention has saved Lisa, subject to HMRC agreement, some £10 million giving rise to fees chargeable of £1 million plus VAT. I would like to remind you of Barrie's remarks that if Lisa paid £20 million and did not get prosecuted, it will be a very good result. These remarks were made in your presence at Lisa's home. You have not quantified these amounts of estimates as by doing so; you confirm the level of my firms' [sic] fees.

…

7. It was agreed with Lisa that we should formalise our agreement. This resulted in the letter of engagement which she agreed to sign upon her return from holiday in Las Vegas last summer. …

8. The fact that Lisa has refused to communicate with me of late, coupled with the convenient misrepresentations of the facts in your email cause me great alarm as they appear to be the actions of someone preparing to evade payment of their liabilities. If Lisa can go to the extent of acting in such a manner with my firm's outstanding fees of £585,000 plus VAT one has to consider the extent that she could have gone to in respect of her disclosure to HMRC where liabilities were estimated at £20 million. It is habitual of me to review my work and opinions arising there from. I originally allowed a benefit of doubt I had based on Lisa's credibility in my eyes. You, however, have done all you can to destroy her credibility. There are matters that require further, better particulars from Lisa in respect of her disclosure and I would like to sort that out before her credibility is completely destroyed in the eyes of HMRC too.

…"

96. The first time Mr. Silverman suggested to Mr. Farrukh that he had been overpaid was in an e-mail dated 15 July 2010:-

"Thank you for your various emails and I think that I should point out the fallaciousness of your statements in regard to the potential commission/fee account due to you.

Wilson Wright & Co. produced work which calculated the amount of the original gift to Lisa and then the amount of interest earned and capital gains over the period resulting in a proposed payment to HMRC of £3.9m (including the Exors of C Rosen deceased payment) following disclosure.

Lisa then discussed this with yourself and you obviously told her that you could negotiate a lower settlement with HMRC and would prefer to use Davenport Lyons instead of Blake Lapthorn Tarlo Lyons as you considered there to be a conflict of interest. Using the figures already provided by Blake Lapthorn Tarlo Lyons and Wilson Wright & Co. you reworked those figures and advised Lisa that the amount to submit was the sum of £3,260,000 (including the Exors of C Rosen deceased payment) and this was the sum submitted to HMRC.

Therefore as I see it, the saving, if HMRC agree the figures, is £640,000 and your 10% fee would amount to £64,000, of which you have been substantially overpaid.

You mentioned that Wilson Wright's calculations were in the region of £6 to £20 million – they were not, as shown by their own proposed calculations mentioned above. There are no calculations issued by Wilson Wright & Co. in excess of £3,800,000 plus the payment for C Rosen decd. If you say calculations exist, Lisa and I and Barry Carmel would like to see a copy.

The original agreement herein was 10% of the saving you achieved between Wilson Wright's figures and your own. As evidenced by your statement in your email of 26 October 2007. There was also a "No Win No Fee" proviso. This proposal and agreement were in the presence of Lisa, Ricci Burns, You and I.

I really do not think that we have anything further to discuss until the final settlement of this matter."

97. In cross-examination Mr. Silverman accepted that he had been in error in suggesting in that e-mail that the Wilson Wright calculation was available when Mr. Farrukh was first engaged.

Conclusions

98. It has to be said that the version of the agreement made in July 2007 for which Mr. Farrukh contended seemed wildly improbable. The suggestion that Mrs. Voice might have agreed to pay Mr. Farrukh 10% of savings to which he had made no contribution was most implausible. It seemed even less plausible when one appreciated that the possible liability in respect of CTT considered in the Draft Note was either nil or £6,000,000, and that the ultimate liability depended entirely upon the decision of HMRC. It did not seem remotely likely that Mrs. Voice had agreed to pay Mr. Farrukh £600,000 if HMRC decided not to seek CTT on the transfer of the Swiss Funds to Mrs. Voice.
99. Mr. McCue drew attention to the fact that, on Mrs. Voice's case, the greater the notice which Wilson Wright took of Mr. Farrukh when determining what the final estimate of liability to be put to HMRC was, the lower the sum to which Mr. Farrukh would be entitled. That is true. However, there is a certain analogy with a lawyer taking on work on a conditional fee basis. If acting for a claimant, the lawyer receives nothing unless the claim succeeds. If the claim is resisted up to trial, there is a risk of failure at the trial, and the outcome will only be known at the conclusion of the trial. So in the case of the agreement which Mrs. Voice contended had been made with Mr. Farrukh. He was to get nothing unless he was able to achieve a better outcome for Mrs. Voice than the aggregate liabilities estimated by Wilson Wright. Whether he was to receive anything, and, if so, how much, depended entirely on the terms of the settlement with HMRC. In the same way that a lawyer undertaking work for a claimant on a conditional fee basis is, in effect, gambling on the outcome of the claim, Mr. Farrukh was gambling on the outcome of the HMRC assessment of the disclosure ultimately made in November 2007. Actually, at the level whether Mr. Farrukh achieved a better outcome than the estimates made by Wilson Wright, success was achieved, so at that level the gamble was to the benefit of Mr. Farrukh. In my judgment the version of the agreement of July 2007 for which Mrs. Voice contended was a much more commercial version than that for which Mr. Farrukh contended at trial.
100. I have undertaken the analysis of the contemporaneous and later documentation relevant to the contentions of Mr. Farrukh, on the one hand, and Mrs. Voice and Mr. Silverman, on the other, which I have because, as it seemed to me, it was important in order to see whether the documentation indicated that, notwithstanding its apparent lack of commerciality, Mr. Farrukh's version of the original agreement was correct, or whether it supported the version of Mrs. Voice and Mr. Silverman. In the course of travelling through the relevant documentation I have made observations as to the extent a particular document seemed to be consistent with the pleaded case of either party and the oral and witness statement evidence relied upon at trial. There are points, which I have noted, which can fairly be made in relation to documents produced by Mrs. Voice or Mr. Silverman, that what was set out differed from what the case at trial proved to be. However, Mr. Farrukh's documentation was mutually inconsistent, and, taken as a whole, significantly at variance from what he contended in his witness statement dated 12 November 2012 had been agreed initially and in subsequent variations. The other significance of the contemporaneous and later documentation was that, in my judgment, cross-examination of the relevant witnesses on documents which seemed inconsistent with the evidence contained in the witness statements put before me at the trial provided a useful opportunity to assess the demeanour of each relevant witness.
101. Although Mr. David Matthias Q.C., who appeared on her behalf, sought to present Mrs. Voice as vulnerable, and requiring protection and assistance in the conduct of her business and personal affairs, whilst Mr. McCue sought to present her as a capable and shrewd business-woman, a description with which Mr. Silverman was prepared to agree, having seen Mrs. Voice in the witness box being cross-examined, very properly and with great skill by Mr. McCue, I came to the conclusion that the truth lay somewhere between the extremes put before me. Mrs. Voice is obviously intelligent, with a mind of her own and a desire to achieve whatever objectives she identifies for herself. However, in the formulation of those objectives, and in the planning of how to achieve them, I think that she is, and was in the period 2007 to 2009, much in need of assistance. In particular, in the period with which this judgment is concerned, I find that she needed the assistance of Mr. Silverman on a day to day basis, and that of appropriate professional advisers, specifically, first, Wilson Wright and BLTL, then Davenports and Mr. Farrukh, in dealing with the consequences of the disclosure of the Swiss Funds to HMRC. It was in her need for sound professional advice in the difficulties which she confronted concerning the Swiss Funds that the opportunity for someone so minded to seek to influence her in that person's favour arose.
102. It appeared to me that, so far as is relevant to any issue of fact which I have to decide, Mrs. Voice gave evidence which was honest, and, to the best of her recollection, accurate. Mr. McCue invited me, in his closing submissions, down the potentially treacherous path of making findings about the circumstances prompting the disclosure of the Swiss Funds to HMRC. In particular, he invited me to consider whether it was appropriate to find that Mrs. Voice had known perfectly well from the moment when she became beneficially entitled to the Swiss Funds, or at any rate long before disclosure was actually made to HMRC, that the existence of the Swiss Funds and the income which they had generated needed to be revealed to HMRC or its predecessor, the Commissioners of Inland Revenue. When asked about that Mrs. Voice told me that her husband had told her that the Swiss Funds did not need to be disclosed because they were, so far as the United Kingdom authorities were concerned, offshore, and she continued in that belief until the litigation concerning her son and her husband's estate to which I have already referred. I did not consider that it was necessary or helpful to reach any conclusion on this point. What I was concerned with was whether the evidence of Mrs. Voice in relation to the matters relevant to the issues in this action was truthful, and, if truthful, accurate.
103. Mr. Silverman took very great care in giving his evidence in cross-examination. He sometimes reflected for some seconds before answering questions. Although invited by Mr. McCue to take the view that Mr. Silverman, like, Mr. McCue contended, Mrs. Voice, had advanced false evidence with the intention of assisting Mrs. Voice resist claims of Mr. Farrukh which they both knew perfectly well were soundly based, that was not at all the impression Mr. Silverman made upon me. He gave his evidence, as it seemed to me, not only carefully, but in a straight-forward manner and with a view to being as accurate as he could in his answers.
104. In stark contrast to the impressions made upon me by Mrs. Voice and Mr. Silverman, the view which I formed of Mr. Farrukh coincided with the submissions made about him by Mr. Matthias in closing. I adopt these observations, with which I entirely concur, from the written closing submissions of Mr. Matthias:-

"7. … He was, in short, evasive and mendacious in his evidence and throughout his evidence. …

8. … [Mr. Farrukh] is a man who lies without compunction, who makes up as he goes along any version of events that he considers will best suit his purposes at the time. … nothing he says or writes can be taken as true unless it [is] supported by independent corroboration. …"

105. Ironically, given Mr. McCue's submissions concerning Mrs. Voice, a stark illustration of the opportunistic approach to truth adopted by Mr. Farrukh could be found by comparing what he said at paragraph 9 of his witness statement dated 12 November 2012, "Mrs. Voice … is a shrewd and capable businesswoman who has built up a major property portfolio over the years …", with how he described Mrs. Voice in a letter dated 29 October 2007 addressed to Mrs. Voice herself, but intended to be shown by her to Wilson Wright and BLTL:-

"However she has no knowledge of tax matters. It is a matter which is simply beyond her. She discharges her responsibility by employing the best and most trustworthy without any consideration for cost. In this capacity one can relate her to a person with no particular financial ability who finds it very difficult to understand the legislation or the work being done for her by her advisers. …. The slightest pressure, irrespective of its nature, triggers some kind of mental block which is very debilitating and disabling. Every time I met her at her home where she could light up her cigarette and have her diet coke I made good progress in my interview. However when I met her in an office environment where she was not at ease I found it difficult to get coherent information from her."

106. Perhaps even more ironically, given Mr. McCue's submission, in the letter dated 29 October 2007 Mr. Farrukh expressed the opinion concerning Mrs. Voice that, "She is honest, reliable and trustworthy."
107. I was both astounded and appalled by the manifest disregard for the truth that Mr. Farrukh demonstrated in the documents which he produced during the time of his involvement with Mrs. Voice and her problems, in his pleaded case and in his evidence. I reject his evidence wherever it did not coincide with matters which were not in dispute. Specifically I reject his evidence as to what was agreed at the meeting in July 2007; I reject his assertions that a variation to what was originally agreed was agreed orally with Mrs. Voice in August 2008; and I reject the contention that Mrs. Voice agreed a further variation in August 2009.
108. The result is that I find that what was agreed between Mrs. Voice and Mr. Farrukh in July 2007 was that of which she and Mr. Silverman spoke, with the consequence that, as matters have turned out, Mr. Farrukh has been overpaid.
109. This action fails and is dismissed.