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Never Go Into Business with Family or Friends!

HousesIn what a judge acknowledged to be a classic illustration of the maxim ‘never go into business with either family or friends’, former close associates who fell out bitterly over the profits from a property development ended up fighting out their ‘sorry saga’ in court.

A businessman claimed that he was entitled to a £20,000 ‘consultancy fee’ and a half-share in a house which he had developed with a woman to whom he had been close for 25 years. Friendship had turned to acrimony after she denied that there had been any such agreement and insisted that the house was hers alone.

The businessman’s claim was dismissed by a judge who expressed astonishment at his ‘chaotic’ business methods, which had involved juggling various projects like ‘plates spinning’ and incessant ‘borrowing off Peter to pay Paul’. His evidence had been ‘unconvincing and not credible’.

The woman had not agreed to enter into a joint venture or profit-sharing arrangement and had bought the property for her own benefit, with no intention that her friend would have any interest in it. The judge had commented, “I have listened to this sorry saga with an element of sadness…this case may well be an illustration of the old maxim ‘never go into business with either family or friends’.”

The woman’s name alone was on the property’s title deeds and her plea that the businessman’s role in the development had been confined to that of a ‘project manager’ was accepted by the judge. Far from walking away with a share of the spoils, he was ordered to repay more than £35,000 that he owed the woman.

He challenged that ruling in the Court of Appeal, relying on fresh expert evidence in relation to disputed emails which he argued supported his account of the agreement. However, in refusing permission to appeal, the Court found that there was ‘no real excuse’ for the failure to present the evidence at trial and that his challenge had no reasonable prospect of success.