The £3.6m purchase of a London hotel is at the centre of fraudulent misrepresentation proceedings in the High Court.
Aesha Mohammed Murad and Layla Mohammed Murad, of Bahrain, are claiming that Hashem Kalil Al-Saraj and Westwood Business Inc misled them as to the value of the Parkside Hotel, 48-52 Clapham Common Northside, London SW4.
The claimants contend that, in 1997, Al-Saraj suggested that the parties should jointly purchase the property. He allegedly estimated the hotel’s value at £4.1m, but stated that £2.6m could be raised by mortgage finance, and the remainder could be divided between the parties.
The Murads maintain that they had contributed a cash payment of £858,000, while Al-Saraj informed them that he had paid £641,000.
Although the first defendant maintains that the purchase price of the hotel was £4.1m, both the sale and purchase agreement and the transfer record the price as being £3.6m, with the difference of £500,000 purportedly being the sum that Al-Saraj had agreed to contribute.
Accordingly, the claimants argue that the defendants did not contribute any money towards the purchase.
They claim that “the defendant’s representations were false and made fraudulently, and that the misrepresentations induced them to enter into an agreement with the defendants whereby the defendants obtained a beneficial interest in the hotel, or, alternatively, that the agreement was conditional upon the defendants having invested the sums of money as they had said”.
The Murads also maintain that Al-Saraj had breached his duty as a fiduciary on the basis that, after the parties had become prospective joint venturers, he undertook responsibility for the acquisition of the hotel, and therefore had a duty not to profit from the transaction without their informed consent.
They are seeking declarations as to whether Al-Saraj contributed any sums towards the purchase, that no binding contract existed between the parties for the purchase of the hotel, or, if such a contract did exist, that Al-Saraj was not entitled to share in the profits of the hotel business or the proceeds of its sale.
The hearing continues.
Murad and another v Al-Saraj and another Chancery Division (Etherton J) 21 April 2004.
References: EGi Legal News 22/04/04
