Wood v Lowe & Ors

This is another case in the sad continuing litigious saga of the complex corporate, financial, legal and propertyaffairs of the first and second respondents, a Mr Keith Lowe ("Mr Lowe") and Mrs Anne Lowe ("Mrs Lowe") (particularly the former) and their family^[1].

The instant case chiefly concerns the beneficial ownership of two properties:

The applicant, Mr Christopher Wood ("Mr Wood") is an insolvency practitioner employed by BHP CloughCorporate Solutions LLP of Cleckheaton, West Yorkshire. Mr Peter Sargent above-mentioned, the former trustee in bankruptcy of Mr and Mrs Lowe in their previous bankruptcy in 1996, is now a consultant in the same firm.

Mr Lowe's affairs have now been intertwined with Mr Wood for some time. Mr Wood:

Mr Wood now claims in the proceedings before me :-

The remaining central issues therefore are whether the two properties are, or are not, beneficially vested in

Mr Wood's position is relatively simple:

Mr Wood, as mentioned, was represented by Mr Passfield. Mr and Mrs Lowe have throughout representedthemselves. In practice this took the form largely of Mr Lowe, no stranger to the practice and procedure of civil courts, representing himself and his wife. I acknowledge that whatever may be said as to their conduct behind the scenes, they both presented and represented themselves throughout with dignity, politeness, and restraint.

Emma and Steven were both represented by Miss d'Arcy. Steven, joined no doubt because he and Emma (plustheir children) occupy The Grange, gave evidence, but took little part in the proceedings. He did not and never has claimed any interest in the two properties.

Mr Halligan I have dealt with above.

I was much assisted by Mr Passfield and Miss d'Arcy and by Mr and Mrs Lowe in their respective written andoral opening and closing submissions, arguments, and presentation of their case for which I am grateful. The Evidence

All parties filed witness statements.

For the applicant, I heard evidence from Mr Wood.

For the respondents I heard evidence from them all (save Mr Halligan).

I deal with much of their evidence (particularly Emma's) in the main below, but I should state at the outset thatdespite Mr Lowe's impeccable conduct in his manner of presentation I have treated his evidence with a degree of caution not least because he admitted and accepted that his memory was not reliable. He was on medication which, he said, affected his memory and largely meant his recollection of events was based on enlightenment from documents. Undoubtedly however he was the major influence in his family and the controlling and instrumental will and mind at least so far as their business, financial, legal and property affairs were concerned. Indeed, I would go so far as to say that Mrs Lowe and Emma completely deferred to his wishes and designs even to the point of allowing (in Mrs Lowe's case) her email address to be used for Mr Lowe's purposes as explained below and to signing documents prepared by, or after discussions with, Mr Lowe. For these reasons, I also approached Mrs Lowe's evidence with a considerable degree of caution.

Emma has, in my judgment, a credibility problem. I regret that I have not, in general found her a reliable witness(despite Miss d'Arcy's submission that I should accept her evidence in its entirety) for, amongst others, the following reasons:

Despite Emma's repeated claims that she did not fully understand these matters she was prepared to say and signthese documents as advised or dictated or prepared by her father. None of this reflects well on Emma or her credibility.

As to Steven, apart from confirming Mr Lowe was instrumental in the IVAs entered into by him and Emma hisevidence did not take matters much further.

I should add that I am aware of the criticism of the evidence of Mr and Mrs Lowe made in previousproceedings. I have, however, not allowed this to over influence my judgement of their evidence in this case. The fact that a person may be disbelieved in one case is not necessarily a reason for disbelieving them in another.

I also had a large number of documents over seven bundles comprising exhibits to witness statements and otherdocuments.

The relevant background to the issues concerning the two properties is not largely disputed. It is, as I find it, asfollows.

In 1988 the affairs of Mr Lowe were prospering. He established a trust known as the Keith Lowe 1988

In May 1988, Mr and Mrs Lowe also purchased a property called Springwood also at Priesthorpe Road, Farsley,Pudsey ("Springwood") adjoining the Grange to the north-west. This property is also a large detached residence with outbuildings registered at HMLR and comprised in title number WYK421100. It is currently occupied by Mr and Mrs Lowe. Mrs Lowe's elderly father occupies an adjoining annexe. In the same year (1988) Mr and Mrs Lowe also purchased a further parcel of land to the south of Springwood (title number WYK426855) which subsequently became vested in Mr Lowe's other daughter, Joanna ("Joanna's Land").

In 1996 Mr and Mrs Lowe became bankrupt whereupon the various properties then registered in their namevested in their then trustee in bankruptcy, Mr Peter Sargent.

In 1996 Mr Ross also helped to construct stables on land comprising part of the Grange. Emma (who was and iskeen on horses) managed the stables and rented them out, the horses also using Joanna's Land for grazing. Emma received the rent but paid it over to her father to do with as he thought appropriate.

Between about September and November 2002 a series of transactions took place concerning Springwood, theGrange, and Joanna's Land orchestrated and arranged by Mr Lowe who was hoping to recover the properties previously owned by the family. Mr Sargent was not happy in selling these properties back direct to Mr and Mrs Lowe but he was prepared, it seems, to enter into transactions which facilitated their ultimate transfer to the Lowe family via an intermediary. Mr Ross became such an intermediary. The beneficial interest in Springwood was sold to Mr Ross for £250 and then on, by Mr Ross, to Mrs Lowe for the same sum on 6 November 2002 (hence the assumed date of the 2002 Assignment)^[7]. The same appears (from the copy transfer and solicitors correspondence before me) to have been the intention with the Grange, but in this case the purchaser was changed at a late stage from Mr Ross to Emma (also for £250). Although Emma was assigned the entire beneficial interest in the Grange by the 2002 Assignment, it was Mr Lowe who became the registered proprietor in June 2004^[8] (though no cogent explanation was ever given for this beyond a kind of general - albeit important - statement that he usually dealt with such matters). Joanna's Land was dealt with similarly and ended up in Joanna's name. I deal with the circumstances of these transactions in more detail below.

Also in 2004 Mr Lowe proposed to pay off the mortgage secured on the Grange to Yorkshire Bank and toborrow further money from National Westminster Bank plc in order to pay for works of redevelopment to the Grange and in particular to convert part of it known as the Coach House into a house. For the first (and only time), Emma was asked for her consent to a charge in favour of NatWest over the Grange in priority to that in favour of the trustees of the 1988 Settlement. She duly signed the consent^[9] and the moneys were advanced and charge registered. Mr Lowe presumably paid the mortgage instalments, Emma could not. She did not have the funds. The works of development and conversion had started in about 2002 and had been paid for by family and friends by cash or credit card.

The Coach House development was completed in 2005 when a number of further transactions also took place:

Throughout the period since his first bankruptcy it is unclear what precisely was the source of Mr Lowe'sincome. He appears to have had interests or connections with many different ventures including building and acting as an insolvency consultant (which seems to have taken the form of introducing people to insolvency practitioners he knew).

By June 2011 Emma and Steven were in financial difficulty. They had substantial credit card and utility billdebts. Mr Lowe introduced them to one of his insolvency contacts, a Mr Hodgson, an associate of Mr Halligan of MPH Recovery. Mr Hodgson visited Mr Lowe at Springwood. Emma and Steven were in attendance for part of the time but largely left matters (as was usual) to be sorted out by Mr Lowe with Mr Hodgson. IVA proposals were prepared for both Emma and Steven (and signed by them) providing in each case for a dividend of 0.39p in the pound incorporating information mostly supplied by Mr Lowe. Mr Halligan was the proposed nominee and supervisor.

Included in the information given to Mr Hodgson was the claim that Mr Lowe and Mr Ross were each owedsubstantial sums by Emma and Steven, namely £188,600 and £187,200 respectively. Proofs of debt for these amounts were submitted on 15 July 2011 along with a letter of explanation drafted by Mr Lowe setting out alleged details of the alleged debts. Emma and Steven signed the letters to confirm the amounts owed.

On 28 July 2011 the creditors' meeting to consider the IVA proposals was held. Mr Lowe and Mr Ross did notattend. Six creditors with debts totalling £37,215.12 voted against the proposal. The debts of Mr Lowe and Mr Ross together with Yorkshire Water (£822.06) voted in favour. Thus the necessary minimum 75% of creditors including 50% of creditors not associates of Emma and Steven secured approval to the proposals (see Insolvency Rules 1986 (as amended), rule 5.23(4)). Had the votes of Mr Lowe and Mr Ross (who had not even completed a valid proxy form) not been counted the proposals would not have been approved.

On 5 August 2011 following a written request from Mr Halligan for documentation in support of the claimeddebt, Mr Ross withdrew his claim. He later died the same year in October. Mr Lowe subsequently "waived" his right to a dividend in October 2013^[14].

In January 2013 Mr Lowe granted a tenancy of Belvedere Hall (in his name) at a monthly rent of £2,250^[15]. Emma was not consulted and did not even know who the tenants were. Her father collected the rent and again seems to have used it as he saw appropriate, usually to repay mortgage instalments.

In the meantime, HELP had gone into liquidation. Mr Wood was appointed liquidator. In proceedings before

Mr Lowe's immediate response was to instruct his then solicitor, Mr David Coates ("Mr Coates"), from whom Idid not hear evidence, then of Lupton Fawcett Lee and Priestly (now of Lupton Fawcett Denison Till) and formerly of Brooke North (the firm he had instructed in relation to the property transactions mentioned previously). Mr Coates was asked to register charges and restrictions against Springwood, Belvedere Hall and the Grange in an obvious effort to obtain priority over any charging order registered by Mr Wood to secure the order for costs in his favour. This request was done by, or rather in the name of, Mrs Lowe in an email ostensibly emanating from her (but drafted in my judgment by Mr Lowe despite his doubting this in his evidence) sent to Mr Coates^[16]. It included an indication that Emma wished to register her interest in the Grange and that Mrs Lowe wished to secure loans made by her to her husband on Belvedere Hall. (Mrs Lowe, in her evidence, could not recall any details of her alleged loans.) The email contained no suggestion that Emma had any interest in the latter property.

The following day, however, in a further email^[17] Mr Coates was asked to register a charge against Belvedere Hall to protect the alleged use of Emma's proceeds from the Coach House in the purchase of Belvedere Hall. A few days later, at the beginning of the following month, apparently after consulting Mr Coates, it was decided to draft the declaration of trust whereby it was declared that Emma was the sole beneficial owner of Belvedere Hall. The document (the 2013 Trust) was prepared and signed by Emma and dated 7 October 2013^[18].

In the same month, the IVAs of Emma and Steven were certified as completed, Mr Halligan issuing certificatesof completion. In fact although both IVAs had proposed that they would each be funded by a contribution by Mr Lowe of £2,500 (i.e. £5,000 in all), Mr Lowe in fact only paid in £2,000, £1,000 into each IVA. Mr Halligan also waived part of his nominee's fees and all of his supervisor's fees. By this time Mr Ross had withdrawn his claim and Mr Lowe had waived any right to dividend in the IVAs.

Shortly thereafter, on 11 November 2013 Mr Lowe was adjudged bankrupt having presented his own petition.Mr Wood was eventually appointed trustee in February 2014. That led to further hostility between him and Mr Lowe with the latter attempting (and failing) to secure Mr Wood's removal from office.

Against that background, I now turn to the central issues, the beneficial ownership of the Grange and BelvedereHall.

The Grange is registered in the sole name of Mr Lowe. The registered title contains no mention (whether byrestriction or otherwise) of any beneficial interest owned or claimed by Emma^[19].

The 2002 Assignment of the beneficial interest in the Grange to Emma^[20] was, as I find, part of a series of transactions involving Mr Lowe, Mr Ross, Mr Sargent, and Mr Coates, then of Brooke North, concerning Springwood, Joanna's Land, and the Grange, together forming an enclave of land and houses at Priesthorpe Road, Farsley.

The aim was to enable Mr Lowe to acquire back from Mr Sargent, the trustee in bankruptcy of him and his wife,the properties owned previous to his (and Mrs Lowe's) bankruptcy. At the time the Lowe family (including Emma) lived at Springwood.

Since Mr Sargent would not assign the properties direct to Mr Lowe, Mr Ross agreed to purchase Springwoodand the Grange as an intermediary and assign them on to Mr Lowe. The assignment of Springwood was effected in a similar fashion. The assignment of the Grange was also originally envisaged to be effected in a like manner with Mr Ross as the intermediary since the copy of the 2002 Assignment I have seen whilst amended to show

I must now deal further with Emma's evidence. Despite the arguments of Miss d'Arcy I placed very little weighton Emma's evidence for a number of reasons partly those previously indicated but also for a number of other reasons:

In summary, in my judgment the assignment of the Grange into the name of Emma by the 2002 Assignment wasdone as arranged and organised by Mr Lowe. Despite Mr Lowe's contentions to the contrary, in my judgment it was never truly intended to be beneficially owned by Emma, it was not her property. It was intended to be and became Mr Lowe's, albeit possibly as a kind of pater familias but not as a trustee. Emma largely abdicated total responsibility to her father because she knew it was really his property. He could deal with the property as he thought fit. Mr Lowe and Emma expressly or tacitly allowed the world to view the property as Mr Lowe's. They cannot now, in my judgment, assert the contrary. Emma left everything to her father, and would do and say as he directed her. In so far as she says she trusted him, he did nothing to protect her property (if it was her property) but dealt with it to all intents and purposes as if it was his own.

In my judgment Emma was indeed his nominee and any beneficial interest held by her in the Grange was and isfor his benefit.

The Grange is not occupied by Mr and Mrs Lowe but by Emma and her family. It was not occupied by Mr andMrs Lowe as their sole or principal residence at the date of his bankruptcy hence the provisions of Insolvency Act 1986, ss 283 and 313A (relating to the bankrupt's home) do not apply.

In my judgment therefore Mr Wood succeeds in the Possession Application. I will consider the consequencesand what orders to make at a later date.

Miss d'Arcy, on behalf of Emma (supported by the first four respondents) contends that Emma is the truebeneficial owner of Belvedere Hall on the basis of the use of her moneys from the Grange to acquire this property whether by way of resulting, or constructive trust. She relies on the declaration of trust of 7 October 2013^[32] (the 2013 Trust) merely as an evidential basis confirming what had always been agreed.

As previously stated Belvedere Hall is registered in the joint names of Mr and Mrs Lowe. The transfer in HMLRform TP 1 into their joint names dated 2 June 2005^[33] signed by them both contained the declaration (by the appropriate box being crossed) that they were to hold the property for themselves as tenants in common in equal shares (rather than as might be expected with married couples as joint tenants). As mentioned Mrs Lowe, as part

In cross-examination Mr Lowe indicated that he thought that the declaration of trust (as tenants in common) inthe standard box in the form TP 1 had been crossed due to a mistake though he accepted, as was usual, he alone dealt with the solicitors on the purchase, the family leaving everything to him. If there was a mistake, he did nothing about it (he said he had not pointed out the error at the time) and neither was there any evidence to suggest that he had written at any time to Mr Coates his solicitor acting on the transfer (and who, as I have said, was not called) to correct this alleged mistake. Miss d'Arcy asked me, somewhat on the hoof, to set aside the TP 1 on grounds of mistake. No application was made to this end or to rectify the transfer and I reject this claim. I do not, despite not having heard from Mr Coates, accept it was a mistake.

In Goodman v Gallant [1986] Fam 107 CA a conveyance of property into joint names of husband and wife on trust for themselves as joint tenants was held to be conclusive and left no room for the application of the doctrine of resulting, implied, or constructive trusts absent any rectification or rescission (see per Slade LJ at pp. 1110F-111B). The decision was not doubted in Stack v Dowden [2007] 2 AC 432 HL and summarised at para. 49 by Baroness Hale of Richmond thus:

Thus Mr Wood's primary case is that since Mrs Lowe no longer has any beneficial interest in Belvedere Hall, inview of the conclusive declaration contained in the 2005 TP 1, Mr Lowe's beneficial interest must vest in him as trustee in bankruptcy.

Here again, as with the Grange, so with Belvedere Hall, the pattern was the same. Mr Lowe's dealings with theproperty are entirely consistent with his having ownership to the exclusion of Emma: he mortgaged the property to NatWest in 2007 having previously represented he owned it (valued at £1m) and without seeking any consent from Emma (above). Emma made no claim to it or reference to it in her IVA proposal. It was Mr Lowe who granted the tenancy of Belvedere Hall in January 2013 (above). Emma had no involvement and did not even know who the tenants were.

Emma claimed (in her evidence) that it was agreed at the outset she should have an interest in Belvedere Hall onthe basis that part of the Grange (i.e. the Coach House) should be sold and the proceeds used to develop what became known as Belvedere Hall. The respondents all asserted that there had been a family discussion about this. There may well have been some discussion between the family members about acquiring Belvedere Hall but I do not accept that it was on the basis that Emma would own this property except, if at all, as intended nominee for her father. Any ownership by her would not and did not affect the complete freedom Mr Lowe had to deal with this property as with the Grange, as he thought fit.

The suggestion that Emma somehow had an interest in Belvedere Hall of some description first appeared in

Even when the notion first occurred that Emma might have an interest, the initial suggestion was not that it hadall along been agreed she should own Belvedere Hall but, instead, that her interest should be protected by a charge as if she had loaned the money to purchase the property. It was only after discussion with Mr Coates that it was thought preferable to prepare a declaration of trust declaring Emma was the beneficial owner of the property on the basis (as the declaration recites) that she had provided the purchase moneys^[36]. If she did, it could only have come from the sale of the Coach House as no other potential source was identified. The 2013 Trust document was prepared without any reference to Emma but signed by her (and dated 7 October 2013), she said in evidence, without reading or understanding its contents and because her father asked her to. Again it was, in my judgment, something arranged and orchestrated by Mr Lowe.

Despite all this Emma wrote letters to the Official Receiver in November and December 2013 claiming that shehad loaned the money to her father to purchase Belvedere Hall. Mr Lowe too indicated to the Official Receiver's examiner in a questionnaire dated 3 December 2013 that Emma had loaned the money for this purpose to the extent of £600,000 (in contrast to the current explanation)^[37].

Throughout the proceedings Emma's stance has been unclear up to the point that in a hearing before DJ Kelly on6 October 2015 (at which Emma was professionally represented), on being asked to state on what basis her claim was made to Belvedere Hall the order of that date recorded she claimed her interest "by operation of resulting or constructive trust in the amount of her alleged contribution to the purchase price of" that property^[38]. No mention was made of the 2013 Trust.

The first task is, of course, to ascertain what the intention of the parties was at the time of the acquisition ofBelvedere Hall: that is answered by the TP 1 above-mentioned. In so far as Emma alleges that the intention was that she should have a beneficial interest by constructive trust, the above demonstrates in my judgment that there was no such intention.

Although Emma again referred to discussions I find that it was never agreed or understood she should have abeneficial interest. This idea only arose subsequently as a means of delaying or defeating Mr Wood's claims. Even as a so-called resulting trust arising because of the use of her alleged proceeds of sale from part of the

Although the issue of Mrs Lowe's interest does not arise, if anything, as with the Grange, so with BelvedereHall: the reality is that Belvedere Hall was regarded by all as Mr Lowe's property to do with as he wished for the benefit of himself and the family in whatever manner he thought appropriate.

Moreover, as with the Grange, Emma plainly was never intended to have any specific beneficial interest in theproperty:

Miss d'Arcy submitted that the acquisition of Belvedere Hall was for development or investment purposes (itwas purchased, so Mr Lowe told NatWest as their ultimate intended home - above) and therefore the resulting trust principles survived comments indicating that they no longer served any purpose - at least in the domestic context - (see the judgments in Stack v Dowden (above, at paras. 3 (Lord Hope) and 60 (Baroness Hale) and Jones v Kernott [2012] 1 AC 776 (at para. 25)) on the basis of Laskar v Laskar [2008] EWCA Civ 347 as a nondomestic purchase.

I reject this. I do not accept the respondents' evidence so far as it asserted there was an understanding all alongthat Belvedere Hall was to be Emma's property. The common intention was that it was left by both Emma and Mrs Lowe to Mr Lowe to decide how matters should be dealt with and he decided it should be acquired by him (Mr) and Mrs Lowe. The TP 1 accurately reflected this. Emma did not, in my judgment, truly regard it as her property. At best it was loosely regarded as a family asset, but the ultimate director of operations and the person who decided how it should be dealt with was Mr Lowe. It was always up to him how the property and the proceeds of sale (if such be the case) should be dealt with, just as with the Grange.

I accept that Emma is not a lawyer and unsophisticated in legal matters, but her father was and she left mattersentirely to him to do as he advised and wished. She never challenged him. She left everything to him. Belvedere Hall was never regarded as her property until late in the day and only then when it looked as though Mr Wood might claim a charging order over it.

In my judgment, therefore, Mr Wood succeeds also as regards Belvedere Hall. Having regard to the interests thecourt is required to consider or assume under s 335A Insolvency Act 1986 in my judgment Mr Wood is entitled to the orders he seeks.

It is no longer necessary for me to deal with this matter.

In my judgment however, Mr Passfield was right to discontinue this part of the case but only having regard tothe evidence as it emerged, namely that the claims of Mr Lowe and Mr Ross were not genuine.

The IVA was only "completed" because Mr Ross withdrew his claim, Mr Lowe waived his right to dividend andMr Halligan waived part of his nominee's fees. Thus for some £2,000 (instead of £5,000) the IVAs were completed to satisfy debts of £45,992.51 (Emma) and £33,993.60 (Steven) excluding the claims of Mr Ross and Mr Lowe. As with the Grange and Belvedere Hall, Emma left everything to be arranged by her father and seemed, at least in signing the IVA proposal and the letters confirming the debts of her father and Mr Ross to be, if anything, at the very least careless with the truth. Conclusion

In my judgment therefore there will be judgment for Mr Wood in light of the above. I will discuss the terms ofthe order at a later date.